Business relationships often go sour, and when they do, business owners often seek to split from their partners and move forward down separate paths. Dissolving or splitting up a business via litigation, which is often referred to as a business divorce, is typically an intricate process. Additionally, in many cases, it can be contentious and lead to extended legal battles. If you or your business associates wish to end your working relationship, it is prudent to retain a lawyer who will help you fight to protect your interests. The Atlanta business litigation attorneys of Poole Huffman are adept at helping parties dissolve and divide business in an efficient and civil manner. If you hire us, we will pursue a result that safeguards both your rights and your financial health. We frequently assist individuals and companies in business divorce matters in Atlanta, Tucker, Decatur, and throughout Georgia.Scenarios that Commonly Lead to Business Divorce Litigation
When business partners decide to close a business or one partner chooses to leave a company, issues may arise that prevent a quick and seamless dissolution. For example, the parties involved may disagree over the rights and obligations imparted by a partnership agreement or articles of incorporation, the entitlement of parties to depart with trade secrets or intellectual property, and how to deal with the death of a partner. Conflicts may also surface when partners disagree about the direction of the business, theft of financial resources, or a partner’s breach of a fiduciary duty. Such issues can affect all types of business entities, including corporations, limited liability companies and partnerships and are often the impetus for the pursuit of a business divorce.Dividing or Dissolving a Company Via Business Divorce
Regardless of the underlying dispute that leads a party to seek a business divorce via a civil lawsuit, the pertinent question in most cases is how a company’s shares or assets should be valued and divided. A court's determination on this issue depends, in large part, on whether the parties entered into any agreements addressing how such matters should be handled when they were forming the business, or at any time thereafter, and, if so, what the terms of the agreement dictate.
For example, many companies that are owned by more than one person will have a buy-sell agreement, which is a contract that typically sets forth when owners can transfer their interest in the company, who may buy such interests, and how the interests will be valued. Thus, if a business has a buy-sell agreement, one party will often seek to enforce the agreement when it comes to dissolution or the transfer of assets or shares. If a court finds the agreement to be valid and reasonable, it will likely rule that it is enforceable, and the parties must comply with its terms. In a case in which a company does not have a buy-sell agreement, it may nonetheless have terms that address the manner in which interests may be sold and who may purchase them in the company bylaws. A party in opposition to the enforcement of a buy-sell agreement or company bylaws may argue that the other party breached the agreement in some manner are waived the right to enforce the agreement, thereby rendering it invalid.
If no written agreement stipulates how a company may be divided, sold, or dissolved, the court will typically be tasked with determining the value of the business as well as other terms of the dissolution of a company or division of shares or assets. Approaches a court may take in valuing a business include a market based approach, an asset based approach, an income based approach, or a combination of one or more method. A court is also likely to consider each party’s contribution to the business in evaluating how it should be divided.Confer with a Capable Attorney in Atlanta
The end of a business relationship can be as emotional and combative as the end of a romantic relationship, and it is critical for anyone seeking to dissolve or leave a company to seek aggressive representation. The capable lawyers of Poole Huffman are skilled at helping parties sever their business relationships, and if you wish to obtain a business divorce, we can develop an effective strategy to help you seek a fair resolution. We regularly represent parties in business divorces in Decatur, Tucker, and metro-Atlanta (including Fulton, Gwinnett, DeKalb, and Cobb Counties), as well as throughout Georgia. You can contact us through our form online or at 404-373-4008 to set up a conference.