Business Separation

The situation

A successful third-generation family business needed help. At the time, two of several heirs in their 30s managed the multi-location company and were major shareholders. But they often disagreed on direction and strategy. Personality conflicts and mistrust began to cause a deep family rift … and threatened the company’s viability.

The company’s board of directors hired our professionals to provide objective guidance.

How our professionals helped

In any situation like this, it’s imperative to first listen carefully and confidentially to all stakeholders. By doing so, our professionals were able to objectively assess the value of each partner’s company strategy. And our professionals found both to be viable. So our professionals established an independent valuation for the partners’ mutual buy-out price. However, neither partner was willing to sell.

As a result, our professionals developed two alternative operating and financing strategies for a business divided into two separate entities. Our professionals also structured tax-free separation of the business into two equivalently valued companies, as well as the other owners’ and heirs’ continued participation or buy-out. Our professionals then arranged for debt financing of both resulting entities. Our professionals acted as mediators in difficult negotiations and closed the transaction quietly and satisfactorily.

The result

Today, the family has two viable, valuable and independently owned and managed businesses (and much more peaceful Thanksgiving dinners!).