Letter from the Editors


Author(s) ,

Business Divorce

Private company business owners and investors face a host of challenges in the marketplace in their efforts to make their companies a success. As a result, they are often blindsided when they must suddenly deal with conflicts that arise with their business partners, which may be serious enough to threaten the company’s continued existence. Indeed, the Federal Bureau of Labor Statistics reports that roughly 20% of new businesses fail in their first two years with the failure rate growing to 45% in five years and 65% in 10 years.

“…roughly 20% of new businesses fail in their first two years with the failure rate growing to 45% in five years and 65% in 10 years.”

Federal Bureau of Labor Statistics

Less well known is that many the private businesses that fail do so, at least in part, because of conflicts between the company’s co-owners. Anecdotally, the conflicts among private company business partners seem to be increasing due to adverse impacts that have been caused by the COVID-19 pandemic.

Launching Bradley’s Business Divorce Blog

As business partner conflicts are on the rise, we are pleased to announce the launch of Bradley’s new Business Divorce blog. Our goal is to make the blog a valuable resource for majority owners and minority investors, as well as their legal and business advisors, in a wide variety of private businesses. We will also include information for spouses who are going through marital divorce proceedings and dealing with issues relating to the ownership of private companies and other complex property concerns in their divorce proceedings. 

Fortunately, many business partner conflicts are avoidable, or, at least, the disputes between partners may not be fatal to the company if the co-owners take reasonable precautions to arrange for an orderly partner exit in the future. Bradley’s Business Divorce team includes more than 20 attorneys with significant experience in working to head off future conflicts between business partners and, when necessary, prosecuting or defending claims by and between partners when they arise.

What to Expect

You can expect to hear from us regularly on a variety of topics related to the ownership of and investment in private companies on topics such as:

  • What are the key elements of a Buy-Sell Agreement (BSA) and why is it so important for both majority owners and minority investors to consider entering into a BSA before they accept an investment or make an investment in a private company?
  • Evaluation of key provisions included in private company governance documents.
  • What are some red flags that a potential investor should take heed of before making a minority investment in a private company?
  • When should a majority owner consider pulling the plug on a minority investor in the company based on problems and dysfunction caused by the investor?
  • What specific factors should a private company majority owner look for when considering accepting a potential significant PE investment in the company?
  • How do assignments of minority interests in LLCs take place and do minority owners continue to owe fiduciary duties following the assignment of the interest?
  • Analysis of the Texas statute that applies to derivative claims filed by shareholders or LLC members in closely held companies.
  • What concerns do spouses need to address when they transfer interests in private companies to each other in their divorce settlement?

How to Subscribe

To make sure you don’t miss updates from Bradley’s Business Divorce blog, subscribe to receive our posts via email. If you have any questions or suggestions for our blog, please contact us.


Ladd Hirsch and Brian Gillett

Ladd Hirsch Brian Gillett