Divorce Attorney in Dallas, Texas
If my spouse and I share interest in a joint business venture, how can I be sure I am receiving my fair share during our divorce proceeding in Texas?
If my spouse and I share interest in a joint business venture, how can I be sure I am receiving my fair share during our divorce proceeding in Texas?
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When you look at a joint business operation the question is, what is the court going to do with that? First you’ve got to figure out what is it actually worth? Okay. So you’re going to hire people that are going to perform a business valuation. What is the fair market value of X, Y, Z Widget Company? Okay. So that’s the first step. You got to figure out what it’s actually worth. You know, sometimes you might agree on a business valuation expert for both parties to establish what that fair market value is. Sometimes you’re going to have competing experts who are going to testify as to what the value is. So that’s the first step. You got to figure out what the value is.
Then the second step is, what are you asking the court to do on it? Are you simply asking that you be bought out for your portion, or do you want to maintain ownership of that business and exercise the right to run that business going forward? So you got to figure out what do you want? And then the question is, what will the court do? The court has lots of options. The court can order the business to be sold. The court can order that a receiver be appointed to run the business until the business is sold, if let’s say that there is a concern about some sort of financial impropriety or some fraud that’s going on. Some self dealing. There are lots of things that can be done there.
Or, and this is one that, you know, you got to be careful what you ask for, because you just might get it, let’s say that both spouses have been equally involved in the business and both of them want to maintain ownership of the business. Well, you know, the court has the ability to do what is called a divisioning kind, which basically says that you all are going to remain 50/50 owners of that property or of that business. I mean what a nightmare in a situation? You’re getting a divorce from someone, but you’re going to continue the business.
So there are a whole bunch of different things that are going to play into that. You need to sit down with your lawyer and figure out what do you really want? You know, so that’s the starting point on all that, because there are a litany of things that the court can do.
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Dallas high-net-worth divorce attorney, Mark Scroggins, discusses how to make sure you get your fair share in your family businesses after a divorce. He explains that when dealing with a joint business operation in a divorce, the first question is what the business is actually worth. To determine that, experts are hired to perform a business valuation to establish the fair market value of, say, Widget Company. Sometimes both parties agree on a single valuation expert; other times, each side presents competing experts to testify on value. Establishing the value is always the first step.
Next, the individual must decide what they want from the court regarding the business. Do they want to be bought out for their share, or do they want to retain ownership and continue running it? The court has several options: it can order the business sold, appoint a receiver to manage it temporarily if there are concerns about financial impropriety, fraud, or self-dealing, or, in some cases, allow both spouses to remain 50/50 owners through a process called “divisioning.”
This last option, while legally possible, can be a nightmare—getting divorced yet continuing to co-own a business with your ex. The key, he emphasizes, is sitting down with a lawyer to clearly define what you want, because the court has a wide array of potential actions it can take, and understanding your goals is the essential starting point.
