When you met your business partner, you immediately meshed. You both had the right energy, ideals and dedication — and it shows. Your business is thriving. Your business partner’s private life, however, is another story. Their marriage has gotten messy. One day, your partner announces that their divorce is imminent.
What does this mean for your business? Unless you had the foresight to insist that your business partner obtain a prenup or a postnup that kept your business neatly removed from their marital property before you got started, you could be in for some trouble. Here are some problems you could face:
Why would your partner hurt your company’s operations and damage its profitability? They may just be so preoccupied with the divorce that they can’t think clearly about the business. On the other hand, they may also purposefully be running things into the ground so they look poorer on paper (which can affect how much spousal support and/or child support they have to pay).
An unwelcome partner
You could end up with an additional business partner after the divorce is over. Your business partner is going to have to split their assets with their spouse — and they may not have the cash to buy their spouse out of the business. That may mean splitting their share of the company or transferring their stock (and voting rights) to their ex. You could find yourself working with someone who doesn’t share your vision or even understand how you operate.
At the very least, your business is likely to have to go through a valuation process. That the only way the court can fairly establish the company’s worth (and your partner’s assets before the split). That process can be highly disruptive to your normal operations and time-consuming.
If you’re facing this situation, you may need help finding a solution that’s fair to all the parties involved. Consider asking an experienced attorney to help you resolve your disputes.