New Book on “Business Divorce”
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Just the other day, I opened the first page of Stephen H. Knee’s book, Business Divorce, and found this problem described:
Two individuals form a business. One has expertise in the normal back-office functions, the other is a great salesperson. Over the years, one of the individuals begins to feel that she is contributing much more to the business than the other individual and that is unfair, because both are drawing the same salary and are 50-50 owners. The resentment results in the individuals barely communicating with each other and adversely affects the performance of the business. The decision-making process becomes deadlocked — the resentment builds until there is an event that pushes the first individual over the cliff. The battle has begun.
Stephen Knee, where were ya when I needed ya??
This is one of those thin books — barely 100 pages — that you wonder how you did without all these years. The author has simple and straightforward advice for drafters of partnership, LLC and other similar agreements, that emphasize the importance of buy-sell provisions, triggering events, dispute resolution provisions, disputed valuations, and tax considerations. Psychologist Jane M. Sullivan writes about the inescapable dynamics of closely-held businesses, which often dominate the process of business divorce far more than economic or legal considerations. Knee reminds us, too, that an ADR specialist is not the only essential consultant in a business divorce — legal, accounting, business and even psychological insight is often appropriate in order to fashion a break-up agreement that is mutually satisfactory and sustainable.
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