This blog has discussed in previous posts the complexity and importance of putting a value on the stock in a privately held family business. The issue of how much a business is worth can become especially important when there is a legal dispute over business succession.
Unlike other businesses, family-owned businesses are profoundly affected in many ways when one of the principal owners dies. In the worst case scenario, it can leave the surviving family members facing the possibility of or even being engaged in probate litigation. Such litigation need not only involve family members quarreling about how the business has been or ought to be run.
Sometimes, families can face the threat of a hostile party from outside the family trying to take over the business without the family’s consent; on the other hand, sometimes the family members who have inherited simply cannot operate the business and do no want to do so. Tax issues that could cripple a business are also possible.
Litigation related to business succession can occur in connection with a dispute over a will or over the trust document that controls the transfer of a business’s assets. Our law office has represented other Minnesota families, or individual family members, in litigation involving the succession of a family business. Whether it is an issue involving estate valuation or some other issue, our goal is to represent our clients effectively but also to do so with the full understanding that prolonged litigation can also bring down a family business operation.