BUSINESS DIVORCES: Keeping a Legal Inventory

A prior post in this series discusses the importance of knowing your BATNA in a business divorce:  your “Best Alternative to a Negotiated Agreement.”

Knowing your BATNA includes discovering it, understanding it, improving it, reviewing it, and revising it as circumstances warrant.

It also includes trying to keep up on your opponent’s BATNA, insofar as that is possible.

A portion of knowing your own BATNA and surmising your opponent’s BATNA is taking a deep dive into your legal rights  — and your legal wrongs. 

First, Try Putting Yourself in the Other Fellow’s Shoes

Before inventorying your legal rights in an upcoming business divorce, try to catalog your opponent’s legal strengths.  

You might start by rereading the company’s governing documents from her perspective.  Do not be surprised if you find some provisions you had forgotten about — perhaps because they favor her position.   You might also notice terms you had not fully complied with.

Proceeding to emails you sent her over the years might be the next stop.  Read them as the recipient instead of the author.  Observe how the sentences in those messages might appear to express slightly or even materially different meanings from the intentions you thought you had conveyed.

Your attorney will take these and similar steps, whether you do or not.  He will point out to you that in cataloging your opponent’s strengths in this way, you are also enumerating and beginning to realize your own legal weaknesses in the upcoming business divorce.

Your attorney will help you comprehend the potential legal consequences of your findings.

Second, Cheer Up!  Your Legal Position Probably not as Dreary as You Think

After you’ve performed the First Step, it’s time to list your legal strengths.  Your attorney will assist here, too.

Most likely, your attorney’s analysis will brighten your day.  He will identify and explain your legal rights and your opponent’s probable weaknesses.

Then you and your attorney will together organize a comprehensive preliminary outline of all of the legal strengths and weaknesses of every party and an initial analysis of how these points interact.

Repeat Steps One and Two as Needed

The first comprehensive outline and the initial analysis are only starting positions.  Throughout the process of a business divorce, you and your attorney will find new information that modifies or adds to the first outline of strengths and weaknesses.  Those changes, in turn, will cause revisions to the attorney’s analysis.

Another Example of Common Sense that Isn’t

Everything said above is practical common sense.  Except that it often isn’t, especially in a highly charged business divorce.

An owner quarreling with his business partner is usually like anyone else caught up in an angry dispute: overwhelmingly aware of how his partner has wronged him and correspondingly convinced of how he, therefore, must be in the right.  At first, that very natural reaction can render the owner incapable of seeing the facts objectively and fairly or of relating the facts accurately to his attorney.

A capable attorney should be able to help the client restore his sight.  Asking the client to explain how his opponent would view the conflict can sometimes help.

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