If you are a business owner or a stockholder, understanding the concept of a business divorce is crucial. Like a marital divorce, a business divorce is, in essence, the separation of the shareholders or partners and the liquidation of business assets. Your rights as an owner vary depending on the type of company you have as well as the agreements in place that you have governing the operation of your company. It is critical that you are familiar with your rights as a business owner or shareholder.
At Freundlich & Littman, LLC, we want to preserve your rights whether you are a partner or minority shareholder. A business divorce is often contentious and can last for long periods of time. At the first sign of trouble, give us a call. We work hard to defend our client’s rights.
What Is A Business Divorce?
A “business divorce” is the process during which a business becomes divided. It applies to businesses formed as partnerships, LLCs, and corporations. Some events that commonly trigger business divorces are when a partner is withholding money, a majority shareholder is trying to cut out the minority shareholders, or when it becomes clear that the business can no longer function as it was designed to. It is essential to seek out an attorney early on in the process so that the company assets are accurately evaluated and your payout is appropriately determined.
Business Divorce & What You Can Do
Business divorce is like a marital divorce in many ways. Often, the relations between both parties are volatile. Each side looks to make it out of the divorce in the best possible position. Meanwhile, the prosperity of the business lies in the balance.
The law requires corporations to notify shareholders of important changes that affect them. The majority has more stocks. This means the majority has more weight in the decision-making process. In order to be fair, a corporation should take into account the minority shareholder’s rights.
There are several ways the majority will seek to divorce themselves from the minority. The majority tends to have positions of power within the business. They sit on the board and have the power of dismissal. They will let go of minority shareholders.
Some businesses give employees a share of the stock or a stock option when joining the company. The stock option needs to mature for a period of years before the shareholder realizes its full value. It is an incentive to join the company and stay while the stock matures. Once the majority fires a minority shareholder, the company then sells the stock. Likewise, the company may offer a financial offer if the stock option plan has yet to fully mature. These offers tend to be a pittance in comparison to the full fair market value of a matured stock.
Essentially, the majority hits the minority “where it hurts.” They will not-so-gently push someone into retirement. The majority may assign a minority shareholder to another division to induce quitting. They may also take away certain perks or demote the individual. Once the employee has left, the majority is free to buy the shares.
Via mail or in an e-mail, you may have received notification that a vote has taken place to change minority voting rights. The majority, often just a few shareholders, will overrule the minority interests in an attempt to push out the minority. They are hoping to overthrow the minority to gain control.
It does not stop there. A business may even try to physically prevent a minority shareholder from exercising their rights. Majority shareholders in a business have denied building access to minority shareholders in the past. The vote of a minority shareholder is important for growth.
Minority vote is a right. Do not allow the majority to gain control over your investments.
Business Divorce Lawyers
We at Freundlich & Littman are capable and willing to take a look at your rights. We are business divorce attorneys. If you received a notification, do not hesitate to contact us today. We service the greater Philadelphia area’s businesses. If you fear the majority shareholders are attempting to push out the minority shareholders, do not wait until it is too late. We can circumvent the majority shareholders on your behalf. Do not let the majority affect your rights as a minority shareholder. Contact us today to schedule a free consultation.
Contact Us Today!
Freundlich & Littman, LLC. | 1425 Walnut St Suite 200,
Philadelphia, PA 19102 | Phone: (215) 545-8500
Jonathan Rosenau represented me in the property damage claim to the insurance company. He is talented. He is intelligent. He is professional. He prepared me for examination under oath and provided the best course of action in my situation. As a result of his hard work Insurance Company agreed to reimburse the loss. I highly recommend the firm, and specifically Jonathan Rosenau! Thank you very much for your help!
Jonathan was amazing. Professional, hard-working, dedicated and communicates whenever necessary. I never felt left out of what was going on. On a scale of 1-10 he gets 11. Jonathan performed beyond my expectations. I could not have hoped for a better outcome. Best law firm ever and I've used many. Thank you so much. Lorraine
The team at Freundlich & Littman is superb in every way. They are dedicated, professional and focused on getting their clients the best results. If you want to feel like your lawyer has your best interests at heart, I would call Freundlich & Littman!
I called freundlich and littman after being involved in an automobile accident and they got me in the very next day. After meeting with Johnathan Rosenau Esq. I decided to let them handle my case. The process as a whole is very stressful but Johnathan and the other lawyers made the process very easy. With most lawyers you constantly have to call to check up on your case but with Freundlich and Littman they were the ones calling me and making sure that I was doing everything I needed to be doing. I didn't feel like numbers on a spreadsheet as you might with one of the bigger firms advertising on tv. I was always talking directly to my lawyer Johnathan. When coming into the firm for a meeting I was able to sit with all the lawyers and I was able to ask them all any questions I had. Thats whats unqiue with this law firm, you have your main lawyer but all the lawyers are very knwoknowledge about your case as if it was their own. I am thankful for how hard Johnathan and the other lawyers worked on my case. I am very happy to say that this process has finally come to an end. I hope that I am never involved in an automobile accident in the future but if I am I know who to call.
I called and spoke with Dave who gave me solid advice, free of charge, when other lawyers were telling me to pay them a consult fee just to be able to ask my question! Dave saved me a ton of money and time and I’ll be able to sleep peacefully tonight. Thank you!
David Jaffe is one of the most detailed oriented, well-educated and all around fantastic human beings that I have had the honor of speaking to. David as a lawyer; where do I begin? He went above and beyond for me and returned every call I had quickly, answered all my questions with a level of concern and detail that I did not know existed. Many people who seek the advice and representation of a lawyer do so in a state of worry, anxiety and inability to trust anyone within their situation. David Jaffe not only calmed me down but made me feel like everything was going to be okay (which it is, because he is a genius lawyer). He answered all of my questions even the crazy ones. He never made me feel unheard or ignored. He has a passion for what he does. He has a level of concern that made me not only trust him but trust the entire Freundlich & Littman team. The world is a terrible place we all know that, but after my experience with David Jaffe I think that it actually may not be as bad as I originally thought. If you are in need of legal representation and are reading this then call that number, choose option 6 for David or ask the very kind office personnel who answers your call for David Jaffe. I am not the kind of person who normally leaves a review but then again David isn't your normal kind of lawyer. Thank you again David Jaffe, you are a superhero.
Greg is a fantastic attorney. I have encountered many attorneys in my professional career, this was a very complicated property transaction; however, Greg was so efficient, effective, prompt, professional and delivered. Therefore, I would highly recommend him.
F&L was responsive, understanding, and prepared us well for the lengthy and emotional process that was unavoidable with our complex case. Greg and team remained patient and persevered. We were able to successfully settle our case and move on with our lives. For this, we are grateful for F&L’s efforts and service.
I called and spoke with Jon Rosenau and he gave me great advice about dealing with my landlord. Other firms wanted me to pay them hundreds of dollars just to ask a few questions but Jon was willing to answer everything for me and gave me options I didn't even know I had. Really appreciate the time he spent on the phone with me and I will keep his number saved on my phone in case I ever have anything else I need help with. Highly recommend!
I was involved in ATV accident and Jon went out of his way above and beyond to make sure I was taken care of and he even made sure to include me in on the whole process since this was my 1st going after an insurance company. We won the case and I'm sure it wasnt easy for them. I cant thank Jon and his wonderful staff enough for everything. Thank you so much! Happy holidays
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Over a year ago we became victims of a devastating fire that destroyed our apartment and virtually everything we owned. Recently, we started receiving horrible letters claiming that we were somehow at fault and would be held financially responsible for the damage caused to the neighbors home. Feeling horrified and vulnerable, we called Austin and Greg for help. Not only were they kind, professional, and knowledgeable but they got right to work addressing our concerns and being our voice when we just felt lost and hopeless. Austin and Greg took the time to explain every step of the process with us and ease our overwhelming anxieties and fears. All it took was one letter from Freundlich & Littman and in just a few days we received word that the case had been closed and our prayers were answered. Needless to say, it was an extremely stressful time for us and Austin and Greg could not have been more supportive and considerate. I highly recommend you reach out to Freundlich & Littman with any legal concerns, they will ease your stress and protect your family, just as they did for us!
Using F and L was the best decision I made after a pretty traumatic accident. Jonathan Rosenau was there for me every single step of my journey. He responded quickly, was professional, but also personable. He not only advise me what should be done but guided me through a very difficult time. He didn’t hesitate to ensure that my health was given top priority while he took on all the details. I also don’t doubt that he can push to ensure things get done when needed and is extremely knowledgeable in doing so.
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I submitted a inquiry through their company website about a landlord tenant issue I’m currently facing. The next morning David responsed via phone. He was so nice and eased some of my worry over the phone. I may have a long way to go with this Situation, but if it comes down to me needing representation I will personally reach out to Attorney David immediately. I also appreciate the young woman who answered the phone, she was also familiar with my inquiry and very eager to Help. They both were the light I needed in this unfortunate circumstance. THANK YOU SO MUCH For the kindness you showed me.