In a real-life case of adding insult to financial injury, companies harmed by the disloyal actions of their former partners, officers, managers or employees (the “former insiders”) may also have to pay their legal fees when...more
8/20/2025
/ Breach of Contract ,
Business Litigation ,
Bylaws ,
Contract Drafting ,
Contract Terms ,
Corporate Counsel ,
Corporate Governance ,
Corporate Officers ,
Duty to Indemnify ,
Fiduciary Duty ,
Former Directors ,
General-Business ,
Indemnification ,
Indemnification Clauses ,
Legal Fees ,
Limited Liability Company (LLC) ,
Partnership Agreements ,
Texas
As private companies grow, they need to secure capital to support their efforts to provide more (and/or better) products and services to their clients. The need for emerging companies to obtain growth capital often leads the...more
7/24/2025
/ Business Development ,
Business Divorce ,
Business Ownership ,
Contract Terms ,
Corporate Governance ,
Due Diligence ,
Financial Services Industry ,
Investment ,
Private Equity ,
Private Equity Firms ,
Private Equity Funds ,
Risk Management ,
Shareholders
When a married couple enters into a divorce proceeding, they generally expect to end things in a final decree that fully divides all of their marital assets. But when they fully own or have a large interest in a closely held,...more
7/9/2025
/ Business Divorce ,
Business Litigation ,
Business Ownership ,
Buy-Sell Agreements ,
Contract Terms ,
Corporate Governance ,
Dispute Resolution ,
Divorce ,
Executive Compensation ,
Marital Assets ,
Partnerships ,
Spouses
Success is not just an elusive goal – it can also be difficult to maintain once achieved. For majority owners in private companies, achieving success is just the first hurdle, because once they arrive at this pinnacle, they...more
3/3/2025
/ Business Divorce ,
Buy-Sell Agreements ,
Corporate Governance ,
Employee Benefits ,
Employee Incentive Plans ,
Employees ,
Equity ,
Executive Compensation ,
Fiduciary Duty ,
Incentive Compensation ,
Limited Liability Company (LLC) ,
Private Equity ,
Shareholders
During Valentine’s Day month, we are taking a look at 50-50 owned private businesses. Forming a co-owned company may sound like a good idea on paper because the two partners are close friends or family members who are making...more
2/12/2025
/ Arbitration ,
Business Divorce ,
Business Ownership ,
Buy-Sell Agreements ,
Contract Negotiations ,
Contract Terms ,
Corporate Deadlock ,
Corporate Governance ,
Dispute Resolution ,
Limited Liability Company (LLC) ,
Mediation ,
Ownership Interest ,
Partnerships
In recent years, the headlines have tracked the news of high-profile breakups among business partners in private companies. These business partner fallouts include:
- 2023: Sam Altman was ousted as Open AI CEO (for...more
1/14/2025
/ Business Disputes ,
Business Divorce ,
Business Entities ,
Business Partners ,
Conflict Resolution ,
Contract Terms ,
Corporate Governance ,
Exit Strategies ,
Fiduciary Duty ,
Investors ,
Partnerships ,
Prenuptial Agreements ,
Shareholders
Investments in private companies should continue to flourish in 2025 in light of the revenue and EBITDA growth they delivered this year, and this rosy financial outlook is also confirmed by company leaders. According to a...more
Delaware Chancellor Kathaleen McCormick held again last week that the pay package that Tesla’s board of directors awarded to Elon Musk in 2018 suffers from “fatal flaws,” and it was therefore rejected. This was the second...more
12/10/2024
/ Business Ownership ,
Compensation ,
Corporate Governance ,
Delaware ,
Delaware General Corporation Law ,
Elon Musk ,
Financial Oversight and Management Board (Oversight Board) ,
Majority Shareholders ,
Shareholder Votes ,
Shareholders ,
Tesla
Majority owners of private companies are empowered to exercise control over their businesses, but if they disregard the valid concerns of their minority partners, they may sow the seeds for a divisive business divorce in the...more
Business divorces take place in all types of private companies, including those owned and operated by family members. But families that are willing to engage in thoughtful planning can head off some of the internal conflicts...more
Fast-growing private companies are exciting to observe as outsiders, but on the inside the company founder has the challenge of securing enough capital to fuel the rapid growth of the business. The company’s continuous need...more
Private company owners strive for success but getting there is not an easy or straight path. I have been working closely with business owners now for more than 40 years, and I have been reflecting on the key character traits...more
Majority owners of private companies have many important decisions to make, but one of their most impactful will be selecting the people to serve as the company’s managers (for LLCs) or as directors on its board (for...more
As the year winds down, majority owners can hit the ground running in the new year if they adopt business resolutions that motivate their executive group and create the potential for the company to reach new heights. The...more
12/13/2023
/ Board of Directors ,
Business Entities ,
Business Ownership ,
Corporate Governance ,
Corporate Management ,
Employees ,
Majority Shareholders ,
Managers ,
Minority Shareholders ,
Shareholders ,
Transparency
The one who has the gold often makes all the rules, but the majority owner of a private company who has minority partners in the business does not have complete freedom, because majority owners owe duties that apply to their...more
11/21/2023
/ Business Divorce ,
Business Litigation ,
Business Ownership ,
Confidential Information ,
Corporate Governance ,
Disclosure Requirements ,
Documentation ,
Fiduciary Duty ,
Financial Statements ,
Majority Shareholders ,
Minority Shareholders ,
Private Company Shares ,
State and Local Government ,
Texas
Following a challenging year for business owners, the time to decompress and celebrate with family and friends this holiday season provided a necessary respite. When business resumes, however, there are important action items...more
The “Great Resignation” as it has been called reflects the large number of employees leaving the traditional workforce, and many of those departing employees are leaving hourly or salaried positions to start their own new...more
3/29/2022
/ Acquisitions ,
Buy-Sell Agreements ,
Bylaws ,
C-Corporation ,
Corporate Counsel ,
Corporate Governance ,
Initial Public Offering (IPO) ,
Investment ,
Investors ,
Limited Liability Company (LLC) ,
Minority Equity Investments ,
Offering Documents ,
Risk Management ,
Startups
The seven-year anniversary of the Texas Supreme Court’s decision in Ritchie v. Rupee has come and gone, and the court’s holding from 2014 remains the law: Minority shareholders in Texas private companies do not have a cause...more
3/8/2022
/ Breach of Contract ,
Business Divorce ,
Business Litigation ,
Business Ownership ,
Closely Held Businesses ,
Corporate Governance ,
Derivative Suit ,
Documentation ,
Fiduciary Duty ,
Fraud ,
Majority Shareholders ,
Minority Shareholders ,
Private Company Shares ,
State and Local Government ,
Texas
Private company majority owners and minority investors often focus on the company’s financial health and growth prospects, and may not take the time to review the operating documents of the business – bylaws for corporations...more