Litigating The Family Business: How To Keep Love In The Mix Of A Bad Breakup

Businesses break up all the time, with disputes between founders or partners leading to amicable and non-amicable parting of ways, but when your business is comprised of family, you want to end up on friendly terms, no matter what. Depending on the intensity of the conflict and the level of animosity going around, though, litigating a family business can have brutal consequences on familial bonds.

Here's how to end the business relationship, without sacrificing all the love left in the family:

1. Understand The Legalities Of Breaking Up The Business

Whether your family decides to sell the business or split it up in some new way, it's important that everyone who's worked in it understands what they're legally entitled to. Many companies intertwined with family dynamics have unwritten rules or rules only made up by the hierarchy, but in pure legal terms, there are definitive roles, responsibilities, risks, and rewards. For example, if you've been working for your parents' business for many years as an employee only, you may not be legally entitled to much more than a "Goodbye!" if you're terminated. If you and your siblings took the company over (from your parents) without having a new partnership drawn up and you're now unable to work together as a team, the structure of the company could be in literal shambles, especially without legal guidance.

No matter what the circumstances, whether you're breaking up and re-forming or one person is taking over completely, legal filings and definitions are crucial to everyone's sanity and the survival of both the business and the family itself.

2. Know Your Right To Sue

Even in the absence of the legal documents that define a business and its internal structure, ownership, and status, if you've poured your life into the family company and now risk losing everything, you probably have a right to sue. All your hard work and sacrifice add up to something, but what that is, specifically, will have to be determined by a court. Know your rights and seek the advice of a business litigation lawyer before making any major decisions, especially before you begin arguing with family members.

Maybe you won't ever have to take a brother or sister to court, but being aware of your right to do so could solve more problems than it creates because you'll have leverage that puts you on equal ground. On the other hand, if one or two family members hold all the cards, decisions might be made that would forever drive a wedge between them and everyone else.

3. Consider Putting The Family First

Whatever might come of a legal challenge to the company's ownership and assets, it's important to try and resolve family issues first. Unless you've all completely given up on yourselves as a family unit, it's worth it to put differences aside and face each other as loved ones. Go to family counseling together, where you can set goals of repairing personal relationships. If you can accomplish building bridges back to each other as family members, you can then take on the matter of situating the family business, only with more care and consideration, as opposed to ruthlessness and revenge.

Even if the business is destined to change hands or break up completely, resolving the issues that drove you apart in the first place should be a priority. Keep in mind that a failed or dissolved business may come with special psychological challenges, especially for a long-held family business, which is going to impact your family dynamics too. Each of you will have to deal with the consequences of the decisions made, living with the failure or success individually and together.

4. Hire At Least One Business Litigation Attorney

Depending on the complexity of the business and the impact of its breakup or dissolution on everyone, you should hire a business litigation attorney from a law firm like The Fernandez Law Firm, a Business and Technology Law Firm for every major partner involved in the family business. That way, everyone is sure they are represented legally and fairly and each has their own voice at the negotiating table. While your family could hire a single litigator, when there is considerable infighting, it's usually more beneficial for all parties to be advised and to prepare as single entities, rather than a collective unit.

Also, it's generally advisable that if one member of the family hires a lawyer, others should as well. Particularly during heated and negative negotiations, legal professionals are mediators in more ways than one. Business litigation attorneys understand the passion, dedication, and emotion involved in such situations, beyond the legal terminologies and proceedings. While they're not psychologists or counselors, their skill and experience in explosive and expensive business disputes usually qualifies them in areas of human nature, as well. Since family is involved for you, there's even more reason to strive for an amicable resolution for everyone.

Breaking up is almost always hard to do; however, when you're breaking up a family business, the level of difficulty increases to a painful and precarious level. Follow the instructions of a trusted business litigation lawyer and try to keep the lines of communication open between everyone, even if there's only polite exchanges during holidays and other gatherings. Hopefully, given enough time to heal and move on with your lives, the wounds from the bad business breakup will heal and your family can keep it together. Ultimately, blood is thicker than money or any argument standing in the way.