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 i am involved with a partner with an llc we went to a attonery and had an operating aggrement drawn . i first approched my partner with the buisness deal. i told him that i could furnish him with the right buisness contacts. he agreedto proceed. he asked me what was in it for me. i told him that since i was getting him the buisness, that he could furnish the initial investment of 20.000 dollars. i told him i would give him three months to recoup part of his investment which by the way was about22000dollars the operation aggrement states that we were to have monthly meetings. there have been none i initally asked for 10%of the buisness and in 5 months was to get 25% eventually workingup to 35% at first he was giving what he agred then he started making excuses about not making any money. in 2006he has done approx.515.000bucks. i have a problem believing it is not making money. this case is going to mediation on sept. 29 from what i have told you how would you mediate this. thank you benny boggs
Answer Thank you for your question!
As you may know, 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.
Of course, if I was mediating your case I would be working with you to uncover options and alternatives and helping each side look for ways to solve the issue.
However, I would look to shine light on the following issues:
1. What are the actual records of the activities of the business? Having this can clarify what is really on the table.
2. What do your written agreements say? These will be the starting points to independently confirm what your agreements were.
From here I would be exploring as many areas of agreement as possible and looking for opportunities to craft an exit.
Naturally from a consultant's point of view it is best to have as much structure created at the outset of starting or building a business rather than in the middle because there are inevitable assumptions and expectations created by each party. In your case, I hear the familier sound of the "bulldozer" starting up with the intent of building a case to marginalize both the promises made to you and the contribution you have made. I do not have enough information here to conclude if your partner is designing or not but I don't like the flavor of what you have described.
You should take steps right away to prepare for the mediation. Here are my recommendations:
1. Document a chronological timeline noting promises made and your specific contributions. Also document the rise of this dispute and track how this plays out.
2. Go see a lawyer. The local Bar Association usually has a referral service that will give you access to an attorney for free. You need to understand the legal landscape.
Once you understand where you are legally you are in a position to be clear about your leverage. You should also send a certified letter to your partner stating your case in the vein of:
Dear Mr. Grinch,
Recently you approached me to discuss reducing my interest in this deal and altering the contract we have executed.
Unfortunately I have already complied with the terms and conditions of the contract with respect to the performance in question and therefore I must refuse any suggestion that the contract terms be changed. As you are aware I have
1.
2.
3.
4.
It appears that, through my work providing contacts, 2, and 3 we will achieve the financial goals we had intended and I look forward to a prompt accounting and division of profits as per our agreement. I am happy to explore amending terms and conditions for future projects if you wish.
Sincerely,
Honest John
You must begin calmly documenting and insiting on the value of your contribution right away.
The notion is that if you make it clear that even though you are seeking a mediated remedy you will not be bullied and that whatever you do will cost your partner a lot more money than just honoring the deal, you are likely to prevail.
These are some ideas. Feel free to follow up with additional questions.
For your general 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
