While business partners, shareholders, or members may try to informally resolve an intra-company dispute before resorting to a business divorce and potential litigation, sometimes court is the only real option. If it looks like a business divorce and litigation are just a matter of time, some early actions can be taken that can get you a step ahead of the other parties.
Corporate shareholders and LLC members have certain rights to inspect and copy financial documentation about the company. This information can later prove to be invaluable in business divorce litigation. By getting copies of relevant documents now, you can avoid the possibility of altered or absent documents related to the business later. This step also allows you to get a clear picture of the corporation as it stands and familiarize yourself with the inner workings of the corporation.
Furthermore, if it appears that dissolution of the business, whether voluntarily or involuntary, is the only realistic option, then getting a true valuation of the business and its existing assets at a particular point in time is a good strategy. By providing a business valuation expert with copies of past and present business records, along with other necessary information about existing assets and income, you can get a firm grasp on the actual value of the business should a buy-out of shares or interest or a sale of the entire business be the ultimate resolution. Even getting just an informal opinion without a full-blown valuation report from a business valuation expert can be worth it at this stage in the proceedings.
You also should assess the potential for retaliation if you choose to pursue a business divorce. Your business partner or majority shareholders may be quite upset at the prospect of business-related litigation. You need to prepare yourself to weather that storm, especially if your family is dependent on income from the business.
Finally, if you reasonably anticipate litigation, you are required by law to preserve any evidence that may be relevant to the subject matter of the litigation, including electronically stored information such as emails and text messages. That means not deleting relevant emails, ensuring that auto-delete functions are turned off, and preserving text messages before your smart phone deletes them after, say, 30 days.
If you have questions about the business divorce process, you will greatly benefit from calling us today and getting the advice that you need. Williams Commercial Law Group, L.L.P., has the experience and knowledge to handle your case the right way. Contact Williams Commercial Law Group, L.L.P., today at (602) 256-9400.