Business Owners & Divorce in St. Louis
Business owners who find themselves in the divorce process have the unique stress of preparing themselves and their business for a divorce court case and the aftermath.
As an asset, your business is often subject to legal proceedings when facing divorce.
If it is a legal entity (such as a corporation, limited liability company, or other type of separate legal entity), it may be necessary for that business legal entity to be named as a party to the divorce court case, to protect the interests of the business, which may differ even from the interest of the spouse in whose name the business is owned.
Regardless of the alignment of the parties and whether the business is named as a party to the divorce case, an accurate business valuation is crucial in business owner divorce.
The value of the property and debt is subject to division between spouses, but dividing the property is a complex process.
- In many cases involving business owners, one spouse may have to “buy out” the other spouse in a lump sum or schedule payments over time.
- In the current economic climate, with limitations on credit and other macro-economic factors, this may not be possible.
An attorney, with the help of other business professionals, must be resourceful and creative in fashioning an outcome which allows the business and the party who ends up with the business to survive economically.
Ideally, in most cases, the spouse most active in the running of the business buys out the other from any marital interest in the business and continues to operate the business after the divorce.
- If the business is viable and a buy-out by one of the other is not feasible, the business may be sold with the proceeds divided.
- If the business is not viable and/or if the debts of the business exceed its value, then a business bankruptcy may be necessary.
However, most small business owners and their spouses have personally guaranteed at least some of the debts of the business, so such a bankruptcy may not be feasible, or it may impact the personal credit of one or both of the parties.
The failure of a business can frequently lead to the breakdown of a marriage, so such conditions are sadly all too common.
With all of the possible circumstances of a business owner in a divorce case, it is crucial that the attorney have the skills, experience and resources to identify and resolve the problems experienced by such business owners.
The attorneys of Cavanagh and Associates have those skills, experience, and resources.