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When business owners get divorced, their settlement may have profound consequences for the business and other owners. Often, one spouse “sells” or gives up a share of the business to the other spouse. Since most small business owners do not have enough cash to pay a lump sum for that share, they might have to make installment payments over months or years. It is critical to structure the divorce settlement […]

A recent decision of the Iowa Court of Appeals illustrates the perils of reliance upon industry rules of thumb to value a business in matrimonial litigation. In Marriage of Hagar (11/24/2010), husband and wife purchased a dry cleaning business from a trust established by husband’s parents as part of a business succession plan. Husband and wife agreed to a $300,000 purchase price that was determined by the companies’ accountant. The trust […]

Employ legal tactics and structures to prevent a divorce from deadlocking the business.

A business owner’s spouse who signed a buy-sell agreement was bound by the value in a divorce action.

How do you know whether a professional practice (e.g., medical practice, dental practice, law firm or accounting firm) might have value that can be divided in a a divorce? Here are three signs that a professional practice might have value.

The Seventh Circuit held that the salary earned by a CEO of a privately-held business (including a $17 million year-end bonus) was neither excessive nor a disguised dividend.