Collaboration and Creativity Mean Everything
After the love is gone, can a married couple divorce, but still do business together? With collaboration and creativity, absolutely says attorney Charla Bradshaw.
“Businesses are sometimes destroyed out of pain, anger and fear during a divorce,” says the Denton managing partner for the family law firm, KoonsFuller. “My experience is that failure of a business affects men and women alike. We can do something about it.”
A solution often achieved through the court system has one spouse taking the business, and the other receiving his or her share based on the business valuation. But a challenging economic landscape and tough job market mean that more clients are trying to find ways to continue to do business, says Heather King, who heads the KoonsFuller office in Southlake.
“Many couples believe that a divorce means that all assets must be sold. Even though you may not be married anymore, you have the same incentive, which is to make money,” King says. “You already know the person and know how he or she works. If you have children together you have all the more reason to want the business to thrive.”
KoonsFuller is the largest family law firm in the southwest with four North Texas locations. Almost every divorce it handles has some income-producing entity — a family limited partnership or other closely held business, a large tract of land or major stock holdings.
KoonsFuller attorneys explore as many creative options as possible when considering business contracts, ownership interest, and management of a company. Bradshaw finds that most of her clients have never considered running the business with their exes post-divorce.
“They assume that they will have to break up the business when they dissolve the marriage. But if they can rise above and put other things aside, we can help insure their futures even if they can’t be married to each other.” Bradshaw says. “It may seem far-fetched, but with the people who’ve taken this path, the acrimony generally takes care of itself because they are busy growing their operations and forming their new lives.”
The attorneys have found ways to use joint operating agreements in family law, King says. This type of agreement is enacted when two businesses, usually corporations, join and operate together while retaining their separate entities in terms of profit and management.
“If two married individuals can overcome the emotion and anger, we can use that joint operating agreement model to give each individual his or her own level of control and protection of interests,” King explains. “They each can have a certain level of autonomy, very similar to when two newspapers merge or when two hospitals merge.”
Bradshaw and King can revise a company’s articles of incorporation, declared shareholders, officers and stock issue. An agreement can be drawn to ensure that a spouse retains ownership interest without working at the business. An employment contract can be drafted to accommodate a structure where one spouse is the owner and the other is an employee. The spouses can also enter a partnership agreement.
“We can revise a contract to change management, governance duties, capital contribution, profit sharing, and ownership interest among other things,” Bradshaw says. “The key is to have two spouses who are able to overcome the emotional aspects to work collaboratively and creatively.”
KoonsFuller professionals increasingly work in teams to tackle a large, complex divorce. One associate may deal exclusively with a business valuation, while others research the other party’s spending habits, prep and depose witnesses, and deal with issues of child custody and visitation.
“A good family lawyer must be equal parts businessman, accountant and family therapist to handle the breadth of issues we face,” says Kevin Fuller, KoonsFuller’s managing partner in the Dallas office. This firm hires attorneys with experience in finance, accounting and psychology for just this reason.
The firm also calls upon outside talent when necessary, hiring appraisers, forensic accountants, real estate brokers, financial planners, child psychologists, marriage and family therapists and others to evaluate the situation and often appear in court or participate in settlement negotiations.
Firm CEO Ike Vanden Eykel says KoonsFuller maintains a system whereby each attorney can tap into the expertise of the firm’s 28 other lawyers.
“We say that it’s never our first rodeo because with all the experience at this firm, we’ve encountered every issue no matter how unusual,” he says.
“We say that it’s never our first rodeo because with all the experience at this firm, we’ve encountered every issue no matter how unusual.”
–Ike Va nden Eykel
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Appeared in The Dallas Morning News; Houston Chronicle; Austin American-Statesman; and San Antonio Express-News
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