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…

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…

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…

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…

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…

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…

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…