Bill was the part-owner of a small business he owned and operated with his parents and other family members.
The business was established by Bill’s father and uncle and had operated for many years.
Part of the business was a fruit store which Bill managed. Bill had never worked for anybody other than the family business, and he had limited skills. He would have had trouble getting work anywhere else.
His ex-wife Mary also worked in the business until she chose to resign because it was no longer viable for her to work in the family business.
Why Bill Was Worried
Bill came to us and was worried he may have to sell his interest in the family business as part of the property settlement.
Although it was a small business it was complex and consisted of many companies and trusts in which his other family members also had an interest.
Bill was not in a position to be able to sell his interest in the business without the cooperation of his family members. After all, they were the only ones who would want to buy an interest in this business.
To further complicate matters, there were many transactions between Bill and his family members which hadn’t been documented, and there were loose financial arrangements between them based on trust.
To make matters worse, Bill’s ex had given a guarantee for a loan for one of the properties owned by the family.
The case went to court, and Mary asked the court for 70% of all of the matrimonial property. The only way Mary could get 70% was if Bill sold his interest in the family business or was able to borrow a lot of money to pay her.
But who would lend him the money?
The family business was valued, which was an expensive but necessary part of the process.
How The Matter Was Resolved
The litigation would have been a lengthy and costly process for Bill and Mary if the case had gone to trial.
Fortunately for Bill, the case settled at mediation and Mary didn’t get 70%.
Bill didn’t have to sell his interest in the family business, didn’t have to borrow money to pay to Mary and with the assistance of his father was able to negotiate with the bank for Mary to be discharged as a guarantor to the property.
Bill was delighted with the outcome as it meant he could continue to work in the family business, securing his income and allowing him to move on with his life with his new partner.
In all, because the matter was resolved at mediation it didn’t end up costing him, or the family business, a lot of money in legal fees.
It also allowed Bill to maintain a good relationship with his children and a civil relationship with his ex-wife.