This post features Part 2 of a recent two-part program to be later aired on New York City public access cable in which I was interviewed by Sandra Schulte on an array of topics in the business divorce universe. Sandra has produced dozens of video interviews of guests from various backgrounds on a variety of topics of local and national interest. Her “Speak Up!” interviews are also available on her YouTube channel.
If you haven’t viewed Part 1, it’s available here.
Here’s a timestamped guide to Part 2 of the interview, which you can view here:
1:48 The rise and ultimate domination of limited liability companies at large and in my business divorce practice.
5:20 The different remedies (especially the elective buyout) available in corporation vs. LLC dissolution proceedings.
6:30 The common use of single asset LLCs in real estate planning and their frequent appearance in business divorce litigation.
7:45 I tell one of my favorite business divorce anecdotes. I call it the case of the disappearing parking lot.
11:22 For the umpteenth time in my career, I stress the importance of engaging competent legal counsel at the inception of any new business partnership to put together a foresightful owner agreement that deals with the likelihood of future management disputes and exit scenarios.
14:32 I also stress the need for business owners periodically to revisit their owner agreements to address new circumstances, shifting goals, and matters not anticipated at the outset.
16:40 Succession planning is essential for long term planning, especially family-owned firms.
18:00 Among the most problematic buy-sell provisions I encounter is the “death watch” buy-out which under-values the interest of a deceased owner at book value, creating incentives that can make it difficult to amend as the owners age and/or suffer health problems.
19:00 I respond to Sandra’s question about steps that can be taken to avoid future litigation between business co-owners.
22:20 Over the years I’ve become less enamored with the diminished cost, speed, and discovery limitations of arbitration, but the one advantage it still holds over litigation is the privacy of arbitration proceedings.
24:00 A few words about board deadlock and tiebreakers.
24:20 Owner agreements can’t anticipate every problem and contingency. I talk about the essential role of the firm’s board of directors, managers and officers in resolving issues not otherwise addressed in the owner agreement.
I hope you find the interviews interesting. Thank you for watching.