Atlanta, Georgia Business Divorce and Breakup Attorneys
While parties usually enter into new business relationships with the best of intentions, hoping for a successful venture, sometimes conflicts arise that threaten the continued viability of the business and require resolution. These conflicts can be the result of disagreements over management decisions or style, strategic differences or personality conflicts where business partners find they simply don’t work well together. In cases where business partners or shareholders cannot reconcile their differences, there may be little option but to end the relationship and dissolve the business. These situations, commonly known as “business breakups” or “business divorces,” may require formal dissolution – the legal process of winding down and terminating a business entity.
Depending on the nature of the business, numerous legal and economic issues must be dealt with in business divorces or dissolutions, including liquidating or distributing business assets among partners, collecting and allocating receivables, payment of current liabilities and satisfaction of long-term debt, handling customer accounts, terminating vendor and other contractual relationships, paying employees, and many other issues. The assets of a business can include intangibles such as good will, contract rights and intellectual property such as a business name and any trademarks or service marks of the business. If one partner or owner is continuing the business, the value of these assets and the amount and manner of payment to the withdrawing partner must be determined. Long-term debt obligations, such as bank loans and property leases, are typically guaranteed by the partners or principals who will need to have their liability under those guarantees satisfied, re-negotiated or canceled.
Buy-out, business continuation and dissolution issues should be carefully considered in advance and spelled out in the partnership or shareholders’ agreement. Unfortunately, that is not always the case. Where agreements properly and fully addressing these issues were not entered into, providing direction when parties reach an impasse, the law provides certain procedures to be followed to legally terminate business partnerships and corporations. If those procedures are not followed, or if a party acts in bad faith in seeking to dissolve a business, potential claims for breach of fiduciary duty or wrongful dissolution may arise.
Like the end of marital relationships, business breakups are usually stressful because of the stakes involved. They can also be emotional and bitter, bringing out the worst in parties’ behavior. This could be so because, like marriages, business partnerships are based (at least initially) on trust. Individuals go into business with partners who they believe they can trust. When one partner breaches that trust, it’s not just a business issue – it can become quite personal. Separating emotions from business disputes when things go wrong can be quite challenging, but critically important. When a business relationship sours, a good business dissolution litigation attorney will help keep you focused on your legal and business objectives.
Special considerations in professional practice breakups
Some of the most contentious and complex business divorces occur in the context of professional practice partnerships and corporations made up of doctors, lawyers, accountants, or other professionals. Professionals typically form practice partnerships or corporations to share in the overhead and administration of operating a practice. In addition, there can be professional and other business benefits such as collegiality, sharing professional knowledge and experiences, and leveraging assets (employees, vendors, marketing, etc.) to create a more successful practice with greater earning potential for the partners.
Like many business relationships, however, professional partnerships and other arrangements do not last forever. When disagreements and problems between professional partners arise, they can create particularly thorny and complicated issues that are not present in other businesses. For example, in law and medical practices issues concerning client and patient relationships and confidentiality must be dealt with. Law and medicine remain, to a degree, personal service businesses where the relationship between lawyer-client and doctor-patient is a personal one. In the businesses of law and medicine, however, the question of whether clients or patients stay with a current firm or practice or move with a departing lawyer or doctor to a new practice implicates professional and ethical rules as well as potential issues of tort liability. Similarly, the allocation of future income derived from existing clients and legal matters or physician service agreements, for example, may need to be addressed. In addition, the question of responsibility for professional liability (malpractice) and insurance coverage for tail liabilities needs to be dealt with as notice of claims may not occur for months, or even years, after services are provided or treatment is rendered.
Because of the above and other issues unique to professional partnerships and practices, it is imperative that legal advice be sought as early as possible in the relationship, preferably at the beginning when documents are drafted and executed. If a dispute later arises, you should promptly seek legal advice from a qualified business litigation attorney with the necessary expertise and knowledge to help you navigate the tricky legal issues associated with professional practice partnership and shareholder disputes and breakups.
The Atlanta, Georgia business litigation attorneys at Brownstein & Nguyen have decades of experience representing individuals and businesses in a wide range of business litigation including partnership and shareholder dispute litigation and business divorces. Our attorneys will meet with you, review your documents and discuss your legal options and business objectives to assess your best course of action. Our attorneys have a proven track record, both in and out of the courtroom, of achieving the best possible results for business clients, including in partnership disputes and dissolution cases. Click here to view examples of cases we have handled and notable results, and click here to see what our clients say about our experience and dedication in handling their claims.
If you are involved or may become involved in a business partnership or shareholder breakup or divorce, call or contact our experienced business divorce and dissolution attorneys in Atlanta, Georgia today for a free consultation.
