Even if your assets are straightforward, such as bank accounts or even a family home, property division during divorce is subjective and often contentious. When a family business is involved, the process becomes even more challenging. Valuation and management issues abound and every delay has the potential to seriously diminish the future profit potential of the business.
One striking and highly visible example of this in action is the McCourt divorce that almost destroyed the Los Angeles Dodgers baseball team. However, the same principles and problems apply on the smaller scale of the typical family business:
- It is very rare that divorcing spouses are able to remain effective business partners, making a continuation of the status quo or a 50/50 split of the business impractical.
- Simply liquidating the business and splitting the proceeds between the spouses is often counterproductive. A successful business is usually worth more than the sum of its parts, and being forced into an inopportune sale can result in a substantial loss.
- A frequent solution is to assign the entire business to one spouse and to compensate the other with an extra share of other types of marital property. This is, however, still complicated, as assessing the fair value of a business is far from an exact science and often gives rise to further disputes and controversy.
When dealing with complex assets, especially business interests, going through a divorce without legal counsel is a risk you cannot afford to take. An experienced New York City divorce attorney can guide you through negotiations and ensure you receive an equitable settlement.