Litigation Within the Family is Sometimes Unavoidable

Since many closely held businesses are family-owned, suing your company for minority shareholder oppression often means suing your family. But what if your family thinks you would never pull the trigger on such a lawsuit?

I have been involved with many iterations of intra-family litigations – father suing son, daughter suing mother, everyone suing the brother-in-law. Family members sometimes assume that because of what they perceive as “weakness” that someone has shown in the past, that “weak” member of the family can be pushed around or even manipulated. Often, sexism rears its ugly head, and males of the family count on what they perceive as “passivity” of female family members who are minority shareholders in the family business. Sometimes, though, a suit will be brought on because one family member was pushed past the breaking point, even though the family never imagined that member would ever file a lawsuit.

In one case, parents gave majority control to their son, with the daughter being gifted a minority interest. The brother would share no information with his sister – ever – and treated her as if she were lucky to be a minority owner in a business owned by someone as amazing as he was. Why? Because that was the family dynamic. Growing up, the son was never challenged, and his sister wanted to avoid confrontation. So the way they dealt with each other as siblings growing up carried into their business relationship. He was a bully, and she let him get away with it. Their past relationship made him cocky. He assumed he could do anything, and never have to answer to her or to anyone else.

Big mistake. By overplaying his hand, he caused his sister, who had had enough, to steel her nerves and take him on. He, of course, was eventually compelled by the New Jersey court to provide every financial document imaginable, and his vast malfeasance came to light. Had he not underestimated her resolve, he likely would have gotten away with everything. Instead, he paid her millions for her shares.

Suing family is never easy. Some, who know superficial facts but not the details, may jump to conclusions and blame you for “tearing the family apart.” Knowing you may never be invited to another holiday dinner can be tough to accept. But if you are guided through the process by an attorney experienced in such cases, you can handle the situation in a manner designed to show resolve, yet give your oppressing family members every opportunity to do the right thing. If you can put your head on the pillow at night knowing you tried everything, extended every olive branch, and sought as much as possible to avoid litigation, then any impact on the family is not your fault.

No damage to familial relationships was caused by your lawsuit – it was caused by the actions of the ones who engaged in the behavior that made you sue. An experienced shareholder dispute attorney can help you determine your rights, and how best to enforce them. If you need assistance on this matter or any other Business Divorce needs, please do not hesitate to reach out to me at dcroberts@norris-law.com.