Corporate Management Disputes and Business Ownership
We actively advise private companies and family businesses experiencing corporate governance disputes, involving the company’s shareholders, board of directors and senior executives.
Experience teaches that success requires ambition, a hard work ethic, inspiration, and motivation, and most successful business people are smart, hard-working and honest. However, it is also possible that smart, hard-working and reasonably honest business people are inefficient. When this is the case and a company is in the hands of an inefficient leader, the management must be replaced.
Successful managers end up with a lot of cash for the company and earn money for shareholders. But inefficient managers cheat the company, lavish perks on themselves and most importantly do not earn money for the company and its business owners. As a result, the company is in need of replacing an inefficient manager and one can expect managers to resist such actions which can result in corporate management disputes. The annals of business corporations in the United States are replete with examples of both forms of shirking, ranging from chronic unluckiness, to incompetence, to outright fraud and theft. We employ an array of options and strategies tailored to your business to address these pitfalls and assist in situations involving business ownership disputes and corporate management disputes. We provide mechanisms for uncovering and overcoming corporate management resistance and disputes.
“Protecting your business interests is our top priority.”
A lot of the major disputes arise from important issues like business mergers and company takeovers
With respect to entering into a merger transaction or business or asset sale, specifically a sale of substantially all assets of a business, modern corporation statues give broad authority to the board of directors. In fact, the initial decision to enter into a negotiated merger transaction is reserved to the board of directors’ collective business judgement, shareholders having no statutory power to initiate merger negotiations. As with any conferral of authority, the board’s power to make decisions about negotiated acquisitions and mergers gives rise to the potential for abuse.
Inherent in all corporate acquisitions or mergers is a well-documented conflict between the interests of managers and shareholders of the target company. To purchase a board of directors’ cooperation, a Buyer may offer side payments to management, such as an equity stake in the surviving company, employment or non-competition contracts, substantial severance payments, continuation of existing fringe benefits or other compensation arrangements. Side payments can affect management’s decision- making by causing them to agree to a lower acquisition price and can be an effective tool to persuade managers to accept a low offer. In addition to side payments, managers may engage in self-dealing, which further conflicts with the shareholders’ economic interests.
Moreover, shareholders and partnership disputes are a normal occurrence in a company where more than one person invested money in the business. Conflicts between business owners, partners, shareholders and managers are normal to arise because shareholders and managers are not expected to see eye-to-eye in every situation. Disputes involving owners and managers arise from the company’s daily operational dealings like engagements, contracts, supplier transactions, premises control, human resources supervision, and others. Issues particularly arise when the disputes are not resolved in the right manner and consequently affects the company’s profitability. Once the profitability of a business subsides, it can lead to bigger problems including closing down the company’s operations.
We place your business on the path to success. Contact us, your business lawyer in Florida, to assist you with devising options and strategies to reduce the risk of disputes and advise in cases of conflicts involving business owners and other corporate management disputes.