BCS Mediation Blog

Mediation News and Comment

Protect Yourself in the Event of a Business Partner’s Divorce Using Mediation

Disclaimer: This article does not constitute legal advice. If you have any questions about your individual situation it is best to seek the advice of an experienced legal professional.

The world’s biggest divorce (set to be the most high value divorce on record) isn’t just happening to to two people. It’s also affecting the world’s biggest business. That business, Amazon, is still essentially controlled by Jeff Bezos, after MacKenzie Bezos announced that she was giving up voting rights and 75% of her shares in Amazon. In the world’s most controlled, on-the-surface- amicable divorce ex- spouses have agreed not to rock the boat and put their successful business first. It’s worth noting that MacKenzie was supportive and involved with Amazon since the early days, so the business has her stamp on it too. Not all divorces will be this amicable, however. MacKenzie Bezos could rightly have claimed that her role in Amazon was instrumental in its success and could have demanded more control over the business. The huge stakes in involved are a lesson on how much the personal life of business partners can affect a company. Approach the early days of your business with a married partner with extreme caution. In California, as in many other states with community property laws, what belongs to your business partner, in most states, may belong to their spouse as well.

What’s at Stake for a Business Affected by Divorce and Why Use Mediation

Mediation is a process where a neutral third party can help you resolve a dispute or help you come to any kind of agreement. This can be useful in the early days of a company when you want to make contingency plans for disruptions such as divorce. Mediation also makes the process fair rather than forced. As in a marriage, a business partner may resent a business “prenup”, as they may feel distrusted. At BCS we apply both financial and psychological knowhow to help parties direct the process in a positive way. One important advantage of mediation over litigation is protecting important relationships so the conflict doesn’t affect your ability to work together or do business in the future.

Control

If a partner owes their divorcing spouse money, their business interests will be fair game, and that means voting shares might be up for grabs in a divorce. This could leave a company vulnerable to a sudden sale of shares (if the spouse decides to cash in), or a new personality running the company (who may not have experience in the business at all). Mediation could incorporate early buy-sell agreements to sell the shares back to the company. Or in mediation, a business partner could request or lay out an agreement that a spouse retain the value of shares rather than the voting power (as is the case with MacKenzie Bezos).

Confidentiality

In a public divorce, company finances and the operations of the company may become uncomfortably visible. Confidentiality can be outlined in early agreements or business “prenups.” Mediation in the event of a messy divorce could also help to calm tensions, which could reduce the revelations produced by conflict, or make provisions to keep certain information confidential.

Managing Upheaval

When divorce happens, the company may be subject to valuation, which can be disruptive. New partners taking an active role in the company may also cause upheavals, and shifting loyalties can cause conflict. Not to mention how stress and strain may affect the quality of a business partner’s work when going through divorce. At BCS we combine hard financial knowhow with psychoanalytical insight. We can do valuations, and we can also sit down with partners and employees to work through the emotional history of a business and give everyone the opportunity to feel reconciled. A process that seems intrusive can become a lot less frightening when it is approached with care.

Finance

When a partner suddenly wants to sell or give away their share in the company, or a spouse demands liquidity, how do you find the resources, even in a healthy company? Mediation can help you sit down with partners and agree upon a timeline which suits everyone, making sure your company isn’t adversely affected by sudden twists of fate such as a partner’s divorce.

Who We Are and How We Can Help

At Boileau Conflict Solutions we are a group of well-educated mediators and negotiators with financial, legal and psychological backgrounds who can mediate all business disputes and business relationships. We employ careful scientific, mathematical and legal knowledge to get to the heart of almost any dispute and find a resolution. We use unique approaches informed by game theory, psychoanalysis and communication theory and rely on best practices and negotiation theory to optimize the results you want and need. Mediation can help you avoid costly litigation and protect important relationships. We offer mediation and negotiation, including individual consultation for our clients who need help achieving the best deal and protecting important relationships (sometimes called deal mediation). We tailor the process to the dispute, from facilitative mediation to resolve disputes within a corporate context, to mediation of complex business disputes in every area from intellectual property to employee disputes that might otherwise be litigated. We mediate in a variety of business environments and at every stage of the dispute, from preventative mediation to establish good policy in beginning start-ups, to ongoing conflict management (whether unions are present or not). Business mediation is faster, cheaper and more efficient than letting conflict fester or resorting to litigation. We can help resolve your dispute at urgent notice and in a fast and efficient manner. The business mediation settlement rate is high. Please contact us at our offices in Boulder CO, Campbell, CA, Irvine CA and Beverly Hills, CA, to see how we can help. We are also available via Zoom, Facetime and telephone and can resolve disputes remotely.

Read More About this Topic:

https://www.vox.com/the-goods/2019/4/5/18296734/jeff-bezos-divorce-mackenzie-settlement-amazon

https://www.forbes.com/sites/frawleypollock/2019/03/11/how-your-business-partners-divorce-can-impact-your-firm/#719e6e6a7eae

Leave a Reply