Winstead Business Divorce

Business Trends and Legal Insights for Majority Owners and Minority Investors in Private Texas Companies

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Latest from Winstead Business Divorce

Winstead Business Divorce

Partnership Blues: Can a Bad Business Partner be Removed by the Company’s Majority Owner When No Buy-Sell Agreement Exists?

By Ladd Hirsch on June 10, 2019

As we noted in a previous post (Read Here), the disruption and dysfunction caused by a bad business partner who holds a substantial minority stake in the company can lead to the ultimate failure of the business.[1] This is especially true when the company founder has no buy-sell agreement in place that will allow him/her to redeem the minority investor’s interest in the company. When the majority owner has no contract right…

Winstead Business Divorce

Family Law Post–Maximizing Private Company Value in Divorce: Achieving a Successful Business Divorce When the Marriage Fails

By Ladd Hirsch on May 28, 2019

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Navigating a successful business exit when a marriage ends in divorce often presents challenges for both parties. Leaving aside the emotional tensions present in divorce, resolving conflicts regarding the ownership of business interests in the marital estate is also daunting. This post therefore reviews options for divorcing spouses to in their divorce proceeding. If couples can ratchet down the emotions and the acrimony, the tools discussed in this post may help allow the couple to…

Winstead Business Divorce

Dispute Resolution for Business Partners: The Arbitration Option—Know When to Hold ‘Em, When to Fold ‘Em, and When to Walk Away

By Ladd Hirsch on May 10, 2019

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Entrepreneurs launching new companies today take on a significant gamble, because statistics show that roughly 30% of all new start-ups fail within two years, and only half survive for a full five years. Many businesses fail due to the owners’ inability to meet the challenges of the marketplace, but some start-ups shut down when conflicts arise within the ownership group. Companies can go under over these ownership disputes even when their governance documents include dispute…

Winstead Business Divorce

Melancholy Minority Shareholders: Five-Years after Ritchie v. Rupe, No Cause for Celebration by Texas Private Company Investors

By Ladd Hirsch on April 22, 2019

It’s my party, and I’ll cry if I want to Cry if I want to, cry if I want to You would cry too if it happened to you. —Its My Party, by Lesley Gore Almost five years have passed since the Texas Supreme issued its decision in Ritchie v. Rupe[1] in 2014 abolishing shareholder oppression as a claim under common law by minority shareholders in private Texas companies. Specifically, in Ritchie, the Supreme Court…

Winstead Business Divorce

When Temptation Trumps Restraint: Limits of the Statutory Protection for Texas LLC Managers

By Winstead on April 1, 2019

By the Interested Director Provision in the Texas Business Organizations Code By LaCrecia Perkins and Ladd Hirsch “The only way to get rid of temptation is to yield to it.” -Oscar Wilde “I generally avoid temptation unless I can’t resist it.” -Mae West “That which is hateful to you, do not do unto your neighbor.” -Hillel the Elder Temptation is powerful. We all know this well, which is why these quotes by author and bon…

Winstead Business Divorce

Legendary Hospitality: The Danny Meyer (Shake Shack) Approach to Business Success

By Winstead on March 18, 2019

Hospitality – the friendly and generous reception and entertainment of guests, visitors, or strangers in which the host receives the guests with goodwill. It is a common complaint that companies now provide a disappointing level of customer service. But merely providing good service is not enough for a business to be assured of success. In a superb article on the Skift[1] hospitality website, 6 Basic Lessons in Hospitality From Danny Meyer, Deanna Ting summarizes…

Winstead Business Divorce

Heavy is the Head That Wears the Crown: Overcoming Legal & Business Challenges Faced by Majority Owners of Texas Limited Liability Companies

By Winstead on March 4, 2019

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By Sean Brown and Ladd Hirsch The majority owners of private Texas limited liability companies (LLC’s) enjoy a mixed blessing when they also manage their companies. Majority owners have the power to direct their private companies as they deem fit, but when they disregard the interests of minority owners, they may breach their fiduciary duties to the company. The members of member-managed LLCs and the managers of manager-managed LLCs owe their companies the fiduciary duties…

Winstead Business Divorce

Rejecting the Ostrich Approach: Responsibly Confronting #MeToo Allegations of Misconduct by Private Company Leaders

By Winstead on February 18, 2019

By Abby Kotun and Ladd Hirsch For many company founders, the business they created is far more than an investment and is closer to a baby they have nurtured and supported. As the company achieves a significant level of success, however, the founders may not be quite as involved in day-to-day operations of the business. In this later phase, the owners may have retained an experienced CEO along with other senior officers who are striving…

Winstead Business Divorce

Scaling an Even Higher Bar: Texas Law Raises the Stakes for Private Company Shareholders in Pursuing Derivative Claims

By Winstead on February 4, 2019

By LaCrecia Perkins and Ladd Hirsch A look back at Business Divorce developments during Texas 2018 reflects a continuing negative trend for private company shareholders[1] who have claims for misconduct against the company’s control group (e.g., majority owners, officers, managers, and/or directors). The rocky road for Texas shareholders began in 2014 with the Supreme Court’s Ritchie v. Rupe decision,[2] which eliminated the remedy previously available to minority shareholders of securing a court-ordered buyout of…

Winstead Business Divorce

Surviving The Impostor Syndrome: Staying on Course as a Successful Business Leader

By Ladd Hirsch on January 22, 2019

In her thoughtful column in the January edition of the Texas Bar Journal titled, “Do You Suffer From Impostor Syndrome,” lawyer coach Martha McIntire Newman, focuses on a topic that has too long flown under the radar. Ms. Newman describes this condition as “a state of chronic self-doubt that causes lawyers to fear they will be exposed as incompetent even though the evidence of their success is obvious to their colleagues and clients.” TBJ, Jan.…

Winstead Business Divorce

Business Trends and Legal Insights for Majority Owners and Minority Investors in Private Texas Companies

Blog Authors

Partnership Blues: Can a Bad Business Partner be Removed by the Company’s Majority Owner When No Buy-Sell Agreement Exists?

Family Law Post–Maximizing Private Company Value in Divorce: Achieving a Successful Business Divorce When the Marriage Fails

Dispute Resolution for Business Partners: The Arbitration Option—Know When to Hold ‘Em, When to Fold ‘Em, and When to Walk Away

Melancholy Minority Shareholders: Five-Years after Ritchie v. Rupe, No Cause for Celebration by Texas Private Company Investors

When Temptation Trumps Restraint: Limits of the Statutory Protection for Texas LLC Managers

Legendary Hospitality: The Danny Meyer (Shake Shack) Approach to Business Success

Heavy is the Head That Wears the Crown: Overcoming Legal & Business Challenges Faced by Majority Owners of Texas Limited Liability Companies

Rejecting the Ostrich Approach: Responsibly Confronting #MeToo Allegations of Misconduct by Private Company Leaders

Scaling an Even Higher Bar: Texas Law Raises the Stakes for Private Company Shareholders in Pursuing Derivative Claims

Surviving The Impostor Syndrome: Staying on Course as a Successful Business Leader

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