When Ending Your Marriage Puts A Business In Jeopardy
You and your spouse started a small family business together, you worked over the years to grow the company and now you have decided to get a divorce. It is more than an emotional decision. It is also a business decision, as it puts that company in jeopardy. What should you do?
At Fried and Fried, P.A., in Fort Myers, Florida, we understand how difficult and complex this type of divorce can become. We have more than 70 years of combined experience and a board-certified divorce lawyer. We have seen this many times. You can trust us to put you first and help you explore all of your options. Our attorneys are knowledgeable and dedicated, and we can help you decide how to proceed as you work for the best possible outcome.
You typically only have a few options regarding your company. You can:
- Attempt to work together after the divorce
- Sell the company to a third party
- Have one spouse buy out the other’s share
The third option is most common. One of you has to walk away, and the other has to pay for the right to take over 100 percent ownership of the company.
This feels expensive on both sides. If you buy out your spouse, you must come up with half of the value of the company. Can you do this with assets you already control? Do you need a loan or an investor? If you walk away from the company, you lose your source of income. The buyout gives you a short-term increase in financial capital, but you are now without a career and starting over professionally.
The Difficulty With A Valuation
Unlike a major corporation, it is often very hard to value a family-owned business. You and your spouse may not agree on your personal valuations; the spouse getting the buyout often believes the company is worth far more than the other spouse. If it is a unique business, there may not be many comparable companies in that space. The business valuation process becomes perhaps the most important part of your divorce, but also the most problematic.
Understanding Your Options
Do you want to learn more about your options so that you can get through this process successfully? Just call 239-243-9287 or contact us online to meet with our compassionate, dedicated legal team. We will be happy to answer your questions and help you understand your legal options.