The “Other” Divorce: Litigating a Business Partnership Split

Breaking up is hard to do in any type of relationship: marriage, friendship and in business. Financial issues and emotions run high and, unfortunately, litigation may be the only option to “consciously uncouple” from your partner.

Business divorce can be especially challenging for the following reasons:

  1. Most business partnerships do not have the proper “prenup” agreements in place to address a split up situation
  2. Most business partnerships are entered into quickly and without taking the time to determine if the parties are the right fit to work together
  3. Most business partners do not consider the emotional and financial toll that running a business with another person can take on them personally.

So what happens if you find yourself with no other option but to go to court to remove yourself from a toxic business partnership?

Make the right decisions. Set up a litigation consultation today.

Step 1: Hire an attorney to navigate a fractured business partnership

Believe me, this is not a shameless plug to hire Schaffer Law Firm (although you still should!). Litigating any type of dispute is why us attorneys go to school, sit for the bar and get paid the big bucks for. Unless you have a J.D. yourself, trying to understand the intricacies of the U.S. system of justice is not something I recommend you do on your free time. Knowing which court to file in, how to draft and file pleadings, question witnesses, navigate discovery are things a licensed attorney is trained to do.

I recommend hiring an attorney with experience in civil disputes regarding businesses and contracts. Not all lawyers are created equal, so your personal injury or criminal attorney brother-in-law most likely does not have the background or experience with these types of disputes to represent you competently.

Now for the big questions: cost and time. Most litigating attorneys charge by the hour. Expect to pay a retainer upfront. Also expect to replenish that retainer if it falls below a certain amount (this is called an evergreen retainer). Most litigation disputes will cost several thousand dollars and can stretch on for several years. Some can be resolved quickly. It really depends on the facts of your case but don’t be afraid to ask your attorney for their best estimates on time and cost.

Step 2: Stay involved with your litigation case

At Schaffer Law Firm we evaluate whether to take on a litigation matter based on a number of criteria. One of those is level of involvement and responsiveness of the client. Simply put, if you are not going to be involved in your case by agreeing to meet with your attorney, sometimes for several hours at a time, review drafts of court documents, gather and produce requested documents and other items requested in discovery, then we will not take you on as a client.

As I said earlier, litigation takes TIME and you will not hire an attorney and sit back and watch your case get won. It requires your commitment and diligence throughout the entire process. And I will not sugarcoat this point: it is and can be an emotionally draining process. It is good to have an attorney in your corner that can help you navigate the various aspects of the case, but can also work through some of these emotional issues that arise as well.

Step 3: Should I settle? Principles don’t pay

A very wise attorney mentor of mine once told me that principles don’t pay. I tell every single client I represent in a dispute this quote because if they are looking for their former partner to apologize, feel a certain emotion or anything else intangible, they will never come out of their case the victor. If you look at every decision regarding your case as a business decision (i.e. keep it at dollars and cents) then you should be able to make rational decisions regarding the direction of your case.

Putting it more plainly: if your attorney thinks you should consider settlement, mediation or another alternative means to settle the dispute, you should very much consider that. Look I know that you are angry, hurt, frustrated (insert any negative emotion here), but you will not be feeling that way forever. If you are either the Plaintiff or Defendant and an offer has come in that your attorney thinks you should consider, don’t dismiss them. They are considering the time and expense you would be saving if you chose to settle.

Litigation, and to an extent attorneys in general, are a necessary evil. If you find yourself at a stalemate with your business partner and business cannot continue or you are so at odds that you cannot be in the same room with each other or you want to buy out your business partner but they refuse, going to court may be your only option. Schaffer Law Firm offers free initial consultations to determine the merits of your case and a plan for taking action. Schedule your initial consultation by clicking here.


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