The firm counsels business startups regarding many of the issues relating to the launch of a new business. Critical issues facing startups include choosing the place of business and/or of incorporation, choosing the appropriate business form, choice of tax status, having clear and concise corporate documents such as by-laws, partnership agreements, LLC operating agreements, shareholder/LLC ownership interest agreements, key employee agreement and considering exit strategies at the outset, such as structuring buy-outs of founding partners’ ownership interests and/or planned dissolution in the event of the occurrence of certain circumstances.
The firm also has experience handling “business divorce” cases involving self dealing, management exploitation of corporate opportunities, failure to pay out company profits, minority shareholder oppression, and others. People generally approach things with the best intentions. Despite that, the future is unforeseeable and things do not always go as planned. Unforeseen consequences and unmet expectations are fairly common In connection with closely held companies and partnerships where long time friends and associates sometimes find themselves at odds over the management of their joint business venture. Making matters worse is the fact that often tines the relationship between the former friends, including their rights, obligations, and remedies with respect to one another are not clearly defined either because they did not bother to have proper agreements drafted or attempted to draft these themselves using forms found on the internet. The result can be an extremely contentious situation with no clear cut answers. Our firm is experienced in dealing with these situations, whether by mutual agreement or through mediation, arbitration, or litigation.
Examples of such business divorce matters handled by our firm include:
- Representation of minority member in dental lab business in connection with company breakup and subsequent litigation to enforce restrictive covenant contained in client’s employment agreement.
- Representation of hedge fund manager in action to enforce right to “carve-out” profits against majority owner of general partner of fund.
- Representation of minority member of investment banking firm in derivative action against officers for self dealing, unauthorized issuance of ownership interests, and corporate waste.
- Representation of majority owners of limited liability company regarding separation form removal of minority member where company operating agreement did not provide for buy-out of ownership interests.