DETAILS & OUTCOME
I was at a local pizza shop, where I happened to see a neighbor of mine who asked me if I could help her father with a legal issue. She explained that her father and his older brother each owned 50% of a dry ice company, but they had grown to hate each other so much that, despite working side by side, they had not spoken in over thirty years.
My neighbor’s father learned he was ill and his life expectancy was not long, so he was seeking ways to retire from the company. What he desired was to find a way to sell his 50% share of the company to his brother, but the only way they could communicate was through the company’s accountant and the company’s counsel. My client’s brother offered to buy my client’s share of the business for approximately $200,000, an offer far below market value.
We retained an independent accountant to assist with valuation. Through an investigation of the company’s value, we discovered that my client’s brother and the brother’s son had been diverting business away from the company to a newly formed, similarly named business by presenting it to customers as a “new location”.
My client’s brother also used a second attorney to form the new business entity. Once this was known, I was able to convene a meeting with the brother’s two attorneys, neither of whom knew of the other’s work for the brother, to inform them of the corporate wrongdoings. As a result, within twenty-four hours of the meeting, my client agreed to accept a fair market value offer of $300,000 for his 50% share of the company. He was then able to retire.