Your Business Deserves To Thrive

When Things Fall Apart: Business Partnership, Disagreement, and Dissolution (Part I)

On Behalf of | Aug 23, 2016 | Business Management, Deadlock, Delaware Law Update, Disagreement, LLC, New York Law Update, Uncategorized

Here at The R. Shawn McBride Law Firm, PLLC, we write and speak frequently on business partnership, especially the 4 Ds (death, disability, divorce, and disagreement), which can have a major impact on businesses.  In our previous blog series on business divorce, for example, we talked about why business partners may disagree, describing some instances of conflict that business owners may encounter, and what they can do to protect themselves and the value of their business in the event of a business break-up and the attendant business disruption.  We regularly conduct workshops titled structuring partnerships to help business owners become aware of these issues.  Shawn McBride’s new book titled “Business Blunders! 10 Dangerous Business Mistakes and How to Protect Your Business So It can Thrive!” also touches on the 4 Ds and how to avoid them.

In this new multi-post blog series, we will look at some recent cases involving disagreement among business partners to show how things can play out in real life and what they could have done to minimize the risks of a messy business divorce.  In each of the cases, you will see that many of the problems stem from the lack of a well-drafted operating agreement, tailored to the parties’ needs, that spells out each business partner’s rights and obligations with specificity, as well as the failure to retain separate legal counsel to represent each business partner.  While these might not seem necessary when you are just starting out or when things are going smoothly with your business partner(s), these cases will serve as cautionary tales to remind business owners that it’s always better to prepare than to regret.

This post was the first part of our multi-part series on business partnership, disagreement, and dissolution.  You can find the other posts by searching our blogs at  In our next and last post, we will discuss Cline v. Grelock, a recent Delaware case.

This posting is intended to be a planning tool to familiarize readers with some of the high-level issues discussed herein.  This is not meant to be a comprehensive discussion and additional details should be discussed with your transaction planners including attorneys, accountants, consultants, bankers and other business planners who can provide advice for your circumstances.  This article should not be treated as legal advice to any person or entity.

Steps have been taken to verify the contents of this article prior to publication.  However, readers should not, and may not, rely on this article.  Please consult with counsel to verify all contents and do not rely solely on this article in planning your legal transactions.