AboutTimmy Chou Expertise I am a experienced Mediator and a partner in a management consulting firm. As a mediator I work as a third-party neutral and specialize in partnership/shareholder disputes, management/labor issues, company culture difficulties, and family-owned business problems. I can help describe why alternative dispute resolution may be a good choice for you. As an experienced management consultant I may be able to offer creative ideas to help resolve your organizational and business problems and disputes. "If you say conflict, I say opportunity".
Question Hello,
Myself and business partner of 23 years have decied to go our seperate ways. We have been involved in a S-corporation partnership 50/50 construction business and have done very well, until the mortgage meltdown. The pressures of not enough work have taken its toll. We are splitting assets (tools, equip, etc.), balance of cash, and I have agreed to let him take his clients with him, (he has the most active clients, mine were developers who have went under) with the exception of a commercial contract that began before we had decided to dissolve. It is a time and material repair contract of estimated $70,000 gross value. I feel I own 50% of it, since it was aquired before we had dissolved, he says it is his since it was generated thru his contact and is taking it. Please give me your input on this matter. Thanks, bob
Answer Thank you for your question!
As I always note to questioners, mediators act as neutral third parties to disputes and never "get involved" in judging the merits of conflict, but merely use special techniques to help the parties decide how to negotiate their own settlement. I am not an attorney and so you may wish to consult one.
When I am asked to participate in dissolutions of these types, I gather together all the assets and value them. Only THEN am I in a position to determine a recommended distribution.
In this case, the present and future cash value of this contract is definitely an asset of the company. The question is not "should the contract be split 50/50", but, if it is NOT split, what are getting in EXCHANGE for it.
The list of valuable assets is clear and your partner should be able to see that using a simple ledger sheet there is an imbalance here. You may wish to seek out mediation assistance in order to preserve your relationships and avoid an escalation.
Feel free to follow up with additional questions.
For your information, the pros and cons of the types of dispute resolution methods follows.
GOOD LUCK!
Arbitration, Mediation, and Litigation
Arbitration: the referral of a dispute to one or more impartial persons for final and binding determination outside of the judicial system
Benefits of Arbitration:
Confidential, no public record
Limited exchange of documentation, information
Quick, don't have to wait for a court date
Arbitrators have expertise in the subject matter and are trained in conflict resolution
Cheaper than litigation
Preserves business relationships
Negatives of Arbitration
It's a compromise, no 100% winner
Complex arbitration can be costly
If not satisfied, may litigate the arbitration procedure
Poor results with an unskilled arbitrator
Both parties must agree to cooperate in the process
Mediation: the process by which parties submit their dispute to a neutral third party (the mediator) who works with the parties to reach a settlement of their dispute.
Benefits of Mediation:
Neutral mediator can objectively suggest alternatives not considered before
Parties are directly engaged in negotiating the settlement
Can be quicker than litigation
Less costly than litigation
Preserves business relationships
85% of American Arbitration Association cases mediated find successful solutions
Negatives of Mediation
may not reach a binding decision
unskilled mediator
Litigation: using the judicial system to resolve disputes
Benefits of litigation:
a clear winner and loser
uses a prescribed set of procedures
more predictable outcomes
is final
Negatives of Litigation:
waiting for court dates can do more harm
usually more expensive than mediation and arbitration
part of the public record
