One of the thorniest issues private company owners and minority investors may be required to confront in going through a business divorce is determining the value of the minority interest being purchased. It is not unusual...more
6/16/2025
/ Arbitration ,
Business Divorce ,
Business Valuations ,
Buy-Sell Agreements ,
Contract Disputes ,
Dispute Resolution ,
Investors ,
Majority Shareholders ,
Minority Shareholders ,
Ownership Interest ,
Private Company Shares ,
Valuation
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
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
Money talks when the majority owners of private companies add new business partners who contribute additional capital. When these investors are high-powered PE firms or high-profile companies, with large balance sheets and...more
11/6/2024
/ Business Divorce ,
Business Ownership ,
Business Partners ,
Buy-Sell Agreements ,
Due Diligence ,
Investors ,
Majority Shareholders ,
Minority Shareholders ,
Portfolio Companies ,
Prenuptial Agreements ,
Private Company Shares ,
Private Equity Firms ,
Repurchase Options ,
Right of Redemption
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
Conflicts between co-owners in private companies are common, but the vast majority are worked out through dialogue and negotiation. When these internal conflicts cannot be resolved, however, minority investors may file suit...more
When divorcing couples hold ownership interests in private companies as part of their marital estate, they will have to address a number of business issues related to these interests in their divorce settlement. Planning...more
Hindsight can be a wonderful thing, especially if hard-earned lessons are adopted by others who are willing to learn from past mistakes. When private company owners and investors share with me some of the wisdom they have...more
Business owners of private companies invest huge amounts of time and resources in their business, which may include the bulk of their financial capital. For owners who do not want most of their net worth to remain tied up in...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
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
Private growth companies have ups and downs – only rocket ships tend to go straight up. Therefore, it can be difficult for an investor holding a minority stake in a private company to know whether a challenging time for the...more
2/1/2023
/ Business Divorce ,
Business Litigation ,
Emerging Growth Companies ,
Investment ,
Investors ,
Majority Shareholders ,
Minority Shareholders ,
Partnerships ,
Private Company Shares ,
Private Equity ,
Private Equity Firms
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
Disagreements are common between business partners in private companies, but most do not lead to a partner exit. When partner conflicts become severe enough to warrant a business divorce, however, majority owners and minority...more
3/8/2022
/ Business Disputes ,
Business Divorce ,
Business Ownership ,
Business Partners ,
Buy-Sell Agreements ,
Corporate Counsel ,
Dispute Resolution ,
Majority Shareholders ,
Minority Shareholders ,
Prenuptial Agreements ,
Private Company Shares