Private Company Business Disputes
- Holland & Knight represents private business owners and equity participants in shareholder and partnership rights disputes, conflicts related to selling an interest in the business, and management and fiduciary responsibility issues.
- Private business disputes often spill into family business concerns, succession planning and family wealth preservation strategies. Our Private Company Business Disputes Team works in tandem with the attorneys in our national Private Wealth Services Group to find creative solutions to business disputes.
- We advise private companies through the life cycle of their businesses, from formation to succession planning. This comprehensive approach and deep understanding of our clients' operating issues and goals informs the advice we offer when disputes arise.
In addition to the disputes that all businesses have from time to time, private companies sometimes must address challenges that are unique to them. These include management and financial conflicts that arise among a small group of partners, members or shareholders, as well as accounting disputes, breach of fiduciary duty claims, disagreements about valuations if a participant wants to sell an interest in the business, disagreements among family members who are participants or heirs to a business, and a range of corporate governance issues.
The attorneys on our Private Company Business Disputes Team use their wide-ranging experience in business governance, formation, tax, valuation, private wealth planning and litigation to find innovative solutions to the disputes that private and family businesses encounter. This often results in creative settlements or resolutions that stop short of expensive, winner-take-all litigation and consider the specific needs and dynamics – both financial and personal – of all parties.
We find that pre-litigation counseling is the most effective way for private companies to avoid disputes. This includes attention early in the life cycle of the business – at formation, if possible – to buy-sell agreements, voting trust agreements, ownership transfer or succession agreements, compensation plans and other potential sources of disagreement as the business grows. Our lawyers use their extensive knowledge of these issues to counsel clients in an effective litigation avoidance strategy.
Our Private Company Business Disputes Team has a strong background in valuing businesses, including working with the concept of "fair value," the standard employed by courts in appraisals and fiduciary actions. Valuation disputes often arise because there is not a ready market that creates a competitive price for an enterprise. We work with valuation experts to determine prices that recognize the parties' contributions to a business, are fair and are likely to be defensible in court. These disputes often can be minimized by shareholder agreements that set the terms for determining value and other parameters of selling.
There are a range of approaches to valuing a company that take into account a shareholder's ability to sell his or her interest and the marketability of the business. When direct comparisons to other similar, recently sold companies are not available – and they usually are not – we help owners evaluate the best way to assess the worth of their business, whether it is by determining the value of assets, future earnings or a projected sale price based on a combination of factors. Our attorneys have drawn up agreements that anticipate the eventual sale of business interests and reduce the likelihood of litigation. When these matters come into dispute, we have considerable experience in determining values that are fair to the parties and that hold up in court.
Shareholder Rights and Corporate Governance Disputes
Companies that begin with friends, family members or just a few investors frequently encounter disputes down the road as members' interests diverge, the business becomes more complex or owners want to extract value from the enterprise. While many disputes can be resolved with the assistance of an intermediary, such as an attorney, we also have experience in the aggressive assertion of dissenters' rights, oppression or unfair behavior, breaches of shareholder agreements and fiduciary duty. Holland & Knight's Private Company Business Disputes attorneys have represented clients on both sides of efforts to remove directors, gain access to corporate records, seek dissolution or "fair value" buyouts, and other remedies.
We recognize that private business governance matters frequently are intertwined with family dynamics and generational wealth planning, and we work to find solutions that preserve the integrity of a business while addressing the financial concerns of all parties. Often, a successful company simply outgrows a more relaxed governance structure that worked well in its earlier years. When disputes occur, we look for solutions that don't cripple the business in the process of resolving the matter. Although some disputes will go to the courtroom, we find that we often are able to find creative solutions that provide effective compromises.
Family Succession Disputes
Private company business disputes often involve family members, especially when a business founder dies or is incapacitated unexpectedly. Family members may disagree about management and control of the business, payouts, valuations if one member wants to buy the interests of others and a host of corporate governance issues.
Our Private Company Business Disputes lawyers have advised thousands of family businesses, helping them negotiate these issues and find compromises that serve different family members' goals, whether they seek liquidity or to continue the legacy of a business.
A Full-Service Litigation Team
When matters must proceed to litigation, Holland & Knight's Private Company Business Disputes Team draws on the support of one of the largest litigation teams in the United States. The team has substantial experience going to court in every business sector and type of dispute, including matters that often affect private companies, such as labor and employment matters, contract disputes and commercial litigation.
Our Private Company Business Disputes Team helps clients evaluate claims and assess risks with an awareness of costs. We leverage technology to reduce paperwork, improve communication with clients and manage e-discovery. Often, alternative dispute resolution methods – such as arbitration, mediation or settlement negotiations, offer the best approach for clients, and we have helped thousands of private business clients use these alternatives that stop short of proceeding to trial.