Business Divorce Attorneys
At the heart of every business are human beings with the capacity for conflict. Differences in vision or strategy between business partners can lead to a split. Things can get even more complicated if the business that is closing is family owned and/or led by a single partner or shareholder with many silent partners or investors not involved in day-to-day operations. The more complicated and complex your business divorce may be, the more you need the experience of high caliber business dissolution lawyers.
At Adair Myers Stevenson Yagi, we regularly represent Houston business owners facing a “business divorce.” There are a variety of reasons a business might come to an end. While some business divorces are voluntary and mutual, others are caused by factors outside of the owners’ control. In the face of an impending business divorce, our attorneys have the skill to guide you through the process with the utmost professionalism and serious regard for both your personal and financial affairs. Our firm has successfully navigated complex business dissolutions for numerous Texas clients in a variety of industries throughout Houston.
While dissolving a corporate entity may be complicated, our law firm has the experience to successfully manage the legal details of an impending business divorce. The formal closure of a business, such as a corporation or Limited Liability Company, is a business dissolution. In order to legally dissolve, the Articles of Dissolution must be filed with the state, and the guidelines set up during the business formation must be consulted. Every business is unique and made up of individuals with different financial interests. Consequently, there is no single solution that applies to all business entities across the board. This can be further complicated by many factors, including the size and scope of the business, the structure of the entity, the amount of debt and assets, and numerous other nuances that must be carefully considered.
While each dissolution is unique, common causes for business dissolution include:
A business dispute can arise anytime two or more parties cannot agree to the terms of an agreement that has already been signed. Disputes can arise between businesses – such as vendors and customers or clients and suppliers – as well as between owners and employees or partners and/or shareholders. Disputes can be handled through negotiation, mediation, arbitration, or litigation, and the details of the dissolution will ultimately determine which course of action is best. Our attorneys are experienced litigators who are willing to use the law to its fullest extent to protect our clients’ financial interests.
Minority Shareholder Oppression
Shareholder oppression occurs when majority shareholders act in a manner that is unfairly prejudicial to the interests of minority shareholders. Prejudicial acts the majority may engage in could include refusing to declare dividends and/or attempting a squeeze out or freeze out of minority shareholders by withholding or blocking important financial information. Other examples of shareholder oppression have even included denying minority owners the ability to enter the premises.
Corporate managers also have a fiduciary duty to all shareholders and may not engage in actions that are prejudicial towards the minority. Should this occur, legal action may be the only option available to protect minority shareholders. In extreme cases it may be necessary to dissolve and windup the company.
Breach of Fiduciary Duty
A fiduciary duty is the legal obligation of one party or entity – the fiduciary – to act in the best interest of another party or entity. A fiduciary is often entrusted with monitoring or managing the finances of a business. A fiduciary is explicitly not allowed to profit from their knowledge of information regarding the business. If a conflict of interest has led the fiduciary to take actions resulting in financial losses, business owner may decide to take legal action against the fiduciary for breaching their legal duty.
Death of Significant Business Partner, Shareholder, or Primary Owner
If the primary business owner dies, the business most often loses its ability to continue operating. Employees, managers, and suppliers will all be impacted. The business may need to be sold or closed.
It is also quite common that one shareholder may run the business and have many investors that are not involved in the day-to-day operations. With the death of an operating partner or shareholder, critical knowledge and skill may be lost, and the ability to continue operating may not be possible. If the business is a corporation, there may be Buy-Sell provisions that allow the other shareholders to buy back the stock and continue operating. The business attorneys at Adair Myers Stevenson Yagi can advise the remaining members on the best course of action based on the filings from the creation of the entity and the specifics of business operations.
Business Divorce Attorney
Regardless of the reasons you need to dissolve your business, the Houston business divorce attorneys at Adair Myers Stevenson Yagi can securely guide you through the complex, legal dissolution process. Our business lawyers have the experience and skill needed to ensure that your interests are protected and that no loose ends remain after the closure which could expose individuals or the entity itself to potential liabilities. Furthermore, should disputes arise during the course of the dissolution of your company, we can seamlessly transition into representing you in litigation.
We have extensive experience in a wide variety of industries in Houston and are available to discuss the details of your situation and determine if we are the right fit for you. We invite you to get in touch with our legal team to discuss next steps.