Owner Disputes and Business Divorces
Owner Disputes and Business Divorces
The value of the business is the key component of most owner disputes and cases involving business breakups.
The alleged actions or inactions of business owners that can lead to business divorces often impact the value of a company and must be taken into consideration to enable the disputing parties to resolve their dispute.
Business divorces are typically state law specific and require close interaction between the engaging counsel and the business valuation expert.
Dissenting Business Owner And Minority Oppression Cases
Business owner or business dispute cases typically fall under dissenting shareholder/member (“owner”) actions and minority oppression (dissolution) actions. Dissenting owner actions occur when a minority owner believes they will be adversely affected by a triggering event (e.g., merger or acquisition) by the company. Each state has dissenting owner statutes, which list specific triggering events.
Oppressed owner disputes can also be referred to as business divorce. Generally, these actions occur when the majority owners in a business take advantage of the minority owners. Most states have judicial dissolution statutes, and in many of these statutes, the minority owner must prove the bias (e.g., oppression and fraud) before a court will order a remedy.
Generally, in dissenting owner cases, the remedy is for the minority owner to be bought out. In an owner oppression case, the most common type of remedy is requiring the company to purchase the owner’s interest. However, the oppressed owner can petition the court to dissolve the company and distribute the proceeds.
The experts at FSS are not attorneys; we rely on our engaging counsel for guidance on the statutes and case law in the jurisdiction where a lawsuit is filed.
Business Divorce Services
We assist our clients with valuing businesses or business interests and offer help that can improve efficiency and reduce litigation risk. Our credentialled business valuation experts can assist with:
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- Discovery assistance
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- Comprehensive valuation reports
- Calculations of value and reports
- Opposing expert valuation report critique
- Opposing expert valuation report rebuttal
- Expert testimony
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To learn more about how our team can assist in business owner disputes and business divorce cases, schedule a call with one of our Litigated Business Valuation experts.
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