The Fight Over the Un-dead Parent

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Frank Brunetti and I were discussing business succession plans for a client the other day, and he uttered the phrase that is the title of this blog post. It will stay with me forever, because every business attorney has seen family disputes involving business succession. In a nutshell, they often become the Fight Over the Un-dead Parent.

The battle starts with a family business and aging parents. The children – rightly or wrongly – begin to angle to protect their own interests. Children threaten to withhold the grandchildren to gain leverage. Children feed the fears and insecurities of an aging parent that the child in charge of the business will bankrupt it, or that this child is taking too much money out of the business.

Who is capable of running the business? I have seen two very intelligent children, successful in endeavors outside of a family business, step into the family operation and cause the business to close in eight months. In this particular instance, the child who had spent all of his adult life in the business was forced out, and the other two children assumed control of the business. The employees that remained after his departure warned the two children against taking certain actions that affected the quality of the product. Their advice was not taken, and the finished goods were rejected by the customer and returned. The next act of hubris by the two children was to demand payment in advance or cash on delivery. The industry did not operate that way, and the business closed...

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© James McDonough, Scarinci Hollenbeck | Attorney Advertising

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