Divorce can become complicated quickly, especially when a family business hangs between the two parties. Making an effective, mutual agreement requires an expert mediator that is capable in business and finance. To facilitate the process, the involved parties should be prepared with their own expectations, and areas they will concede, prior to beginning mediation. The goal of mediation is to find common ground on the division of any assets, so both sides must be willing to discuss the possibilities, with full confidence that what they say is confidential to the meeting. Holding resentments will only further complicate matters, especially if a second-generation family member is involved with the business. Ideally, a partnership or shareholder agreement will have been prepared prior to beginning the business, however if this is lacking then the mediation may sour, requiring a liquidation of the assets and sale of the business. This is not the goal of mediation, as a viable business shouldn’t face failure due to a shareholder disagreement. Coming to the table with your documentation – appraisals, financial commitments, agreements, etc. – will facilitate the process for everyone involved.
Why Mediation for Family Business Divorce?
Mediation is a confidential process that allows the parties involved to speak openly in search of resolution. During the interview process, a mediator will ascertain the available factual, legal information. With this at the table, the mediator is able to stay neutral and impartial, utilizing the available information when addressing areas of concern. Many issues will be discussed during a family business mediation, including succession planning, sale of the business, partnership disputes, and any other areas brought forward.
The Transition of Assets in Business Divorces in Kelowna
If the business is going to continue, decisions will need to be made on how the business will pass through the family. If it will transfer to second-generation family, or already has, then the equitable interests of each member must be evaluated. In many instances, the sale of the business may be inevitable if the transfer or buy-out is not an option. In this case, stakeholder’s shares will need to be assessed, and appraisals of the businesses’ value will take place if they have not already. If additional information is required in the process, an adjournment will occur to allow that information to be gathered. Once all the information is collected, it will be used to find resolution.
Family businesses are a unique challenge to overcome in divorce. Every case is different, and the amount of planning at the start of the business varies drastically between each one. Having an expert mediator involved is the best way to find peace for both parties, where everyone walks away satisfied. This is the best-case scenario in any mediation, and it is the aim of mediation to get as close to that solution as possible.
Contact Divorce & Family Mediation Center of Kelowna for more detailed information on the mediation process for family business divorces. You can call us at 250.863.6399.
No comments yet