Business divorces are necessary when the parties that own a business decide to part ways, often because a dispute has arisen. There are a variety of ways to end a business relationship, but the owners often disagree on what solution is the best alternative. Dissolutions, accountings, shareholder derivative actions, and limited liability company lawsuits are a few examples of how business relationships may come to an end. Instead of spending years fighting over the end of the business relationship in court, the parties may elect to use alternative methods of dispute resolution.
Mediation is an excellent resource for resolving business disputes, both for the parties and their attorneys. For those attorneys who have especially stubborn clients, having a third party neutral explain the strengths and weaknesses of an argument to that client can be just what is needed to settle an issue. Sometimes, a fresh perspective is all that is required to convince the client to let it go.
Mediating a business divorce also allows the parties and their attorneys to discuss the case privately and confidentially. As attorneys know, their clients are often focused on who was “right” and who was “wrong” when a dispute arises. These clients make excellent candidates for mediation because they will be able to focus on solutions to the problem instead of focusing on past mistakes. The adversarial nature of a trial focuses on a winning party and a losing party, and parties often become blinded by wanting to “win” the trial.
Mediating a business divorce also offers more solutions than traditional litigation does. A judge may only be able to dissolve the business and distribute the assets. However, in mediation, the parties, their attorneys and the mediator can get creative with solutions to their dispute, leading to greater client satisfaction with the settlement.