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Protect your Most Important Relationships: Mediate Family Business Disputes

When family business disputes arise, there is so much more to lose than money. Unfortunately it is also more common in family businesses for agreements to be informal, making disputes more likely to arise. A good solution is to turn to mediation to resolve conflicts or formalize agreements. As well as the more technical and legal aspects of agreements, mediation promotes better communication and trust. Business mediation is not just for resolving existing conflicts, mediation can intervene at a number of critical points. For example individual consultation to assist with deal negotiation is sometimes called “deal mediation.” Even if you are making a deal with a family member, it is important to evaluate your interests and come to clear and formal agreements. At Boileau Conflict Solutions we offer deal mediation, consultation and conflict management, often when business relationships are beginning or ending.

Family business conflicts can differ subtly from non-family business conflicts. Some of the issues that can arise include:

Selling the Family Business

This may be more of an emotional issue in family businesses. It also may carry unique hurdles involving inheritance and asset division. Valuation, timing and sensitivity will be especially necessary. Mediation can help clarify the interests involved and make a plan that suits everyone. Deal mediation can be employed whether the business is being sold within the family or outside. This protects both interests and relationships.

Critical Business Decisions that May Affect Profit

The decision to take a new direction with the company or stay with an old approach out of tradition may be more loaded with emotion in family businesses. Preserving the “character” of the business or making bold decisions may be at odds with profit or keeping shareholders happy. Mediation can help to reconcile these conflicts or lay the groundwork for dealing with potential issues.

Removing a Family Member or Changing Governing Rules

In family businesses there may often be conflict over how well someone is doing their job. When family members are involved in a business by default, rather than by election, family members may not pull their weight and/or resentment can arise. Toxic power dynamics can be an unfortunate result. Even if a family business wants to remove a family member over wasteful spending or negligence or make necessary changes to governing rules, these changes are likely not to be perceived as neutral. Mediation can help return decision-making to a neutral place, while acknowledging the feelings and individual interests at work.

Transferring the Business or Succession Planning

What if the business is being transferred within the family? How is the business transferred and how is the transition managed seamlessly? How are employees and shareholders accommodated when the death or exit of a family member may mean a whole new culture? What are the tax issues when business interests are transferred between family members? Planning for transfers in advance or managing sudden changes may call for mediation to ensure that the process goes smoothly.

At Boileau Conflict Solutions, we have backgrounds in finance and psychology as well as the law. We combine analytical and psychological tools, using approaches such as game theory and fair division mathematics. In family business mediation, you don’t have to give up control and submit to the win/lose process of litigation. There is an opportunity to pick a neutral mediator with expertise in the area of conflict. Family relationships are among the most important of our relationships. At Boileau Conflict Solutions, we combine hard-nosed negotiation and financial expertise with an empathetic understanding of the psychological underpinnings of conflict. We are available 7 days a week and in crisis situations at our offices in Campbell, CA, Irvine, CA and Boulder, CO. Please visit us or contact us via telephone, skype, zoom or facetime to see how we can help.

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