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Guidelines to Preserve Business Value During Your Divorce

Posted by attorney Diana Powell

Often, during a divorce, common sense business owners lose perspective and effectively trash a valuable asset due to lack of mutual respect and responsibility. Early in your divorce process, it may be useful to sit with your spouse/co-owner and discuss adoption of the following guidelines. Preserving Business Value During Divorce We adopt the following as some useful "dos and don'ts" to preserve business value during the divorce:

  • Neither one of us will drag our employees, suppliers or customers into our divorce. None of them can really help in our decision-making and none of them should be made to feel insecure about the continuation of the business. We acknowledge that discussion of our divorce with our colleagues will damage our business, and agree to avoid any such discussions.
  • Neither one of us will engage in heated discussions or pointedly cold exchanges while around our employees, suppliers or customers. None of these people are so blissfully unaware to not notice. It is in nobody's interest to have these people decide the business is on the rocks just because our marriage is on the rocks.
  • Neither one of us will run down the other's reputation for sound business decisions. We each acknowledge that our spouse's future earning potential will be important to the children's future.
  • Neither one of us will ask colleagues to deliver messages to the other. We each acknowledge that we need to avoid any acts that might weaken the commitment of those colleagues whose continued loyalty is important to the future of the business.
  • We agree to show up and keep working in the business, and try to make the business environment comfortable for employees, suppliers and customers. We agree to encourage the other spouse to do the same, by treating him or her in a cordial and appropriate manner. We will try to establish parallel schedules that will limit our direct contact with one another and communicate whenever possible through the emails.
  • We will each refrain from unilateral business decisions. Each of us agrees that the other will continue to have access to business information, business computers and business credit cards, to continue the patterns that existed prior to filing the divorce.
  • We agree to keep focus on the business while at the business, and to undertake divorce discussions, including what will happen to the business, for other times and other places.
  • We agree that we will engage a neutral business coach, formally or informally, to help us communicate and find constructive ways of reaching ordinary business decisions during the divorce, if we are unable to reach consensus between ourselves.
  • We agree to continue efforts to make the business as successful as possible this year.
  • We agree to maximize cash flow and preserve cash assets. We have some significant expenses ahead, and one of us may need cash to buy out the other.
  • We agree to keep careful business records, particularly of expenses of the business, including those on credit cards.
  • We agree to communicate a joint statement regarding the divorce, or say nothing about the divorce, to our staff, landlord, lenders, principal suppliers, and important customers. We do not want any of the critical people to become insecure, nor do we want them to start feeling pressure to align with one of us.

To signify your mutual agreement with these guidelines, it may be helpful to you both to sign copies of the guidelines, after checking with counsel, of course

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