AboutDavid K. Staub Expertise I am a business and tax attorney and have spent more than 30 years assisting people in buying, selling, merging and spinning off businesses. I can answer questions on the mergers and acquisitions process and the related legal issues, in general. Topics can include structuring the transaction, negotiating the deal, conducting due diligence, and more. I can also guide people to find sources for answers to specific legal questions which cannot be answered in a forum of this nature.
Experience
Experience in the area I have been an Illinois business attorney for almost 30 years. I have an extensive practice in the mergers and acquisitions area and have been involved in the tax and legal issues on hundreds of business transactions.
Organizations Illinois State Bar Association;
Chicago Bar Association (former Chairman of the Corporation & Business Law Committee and former Chairman of the Mergers and Acquisitions Subcommittee; former Executive Committee member, Federal Tax Committee and Chairman of subcommittee on general tax issues); Glenkirk Foundation (Trustee; Vice-Chairman/Strategic Planning); Association for Corporate Growth, Chicago Chapter; Midwest Entrepreneur Forum; Midwest Association of Alpha Delta Phi - President
Publications Commerce Magazine; YLS Journal; ISBA Section of Taxation Newsletter
Education/Credentials Harvard Law School, J.D., 1977; University of Illinois, B.S. in Accounting, with highest honors, 1974
Disclaimer Responses are intended to be informational only. No response is intended to constitute legal advice or create an attorney-client relationship. Online advice is not a substitute for consultation with an attorney.
Question I am in the process of trying to work out a divorce with my husband. The sticking point is that we own a business together. Since its inception we have both owned 50%. Now he wants me to give him an extra 1%. He thinks this is fair as I am not currently involved in the business, and this will allow him to govern it without having to come to me over changes. The problem is he has accumulated a large amount of debt in the business. I signed off on two different loans as one was suppose to dissolve the other yet he kept both open.
I just need to know that at 49% if that opens me up to any possible problems in the future. I would like to just be bought out but with the debt he of course can't find anyone interested. With a buy out in mind he also wants me to sign an agreement that we will determine the value of a buy out now even if we do not sell my half to anyone for 2 or 3 years out. He was thinking somewhere along the lines of the value being 1 year minus the debt and then I would get half of that.
Sorry if this sounds at all vague but he is not being very straight forward with me and I just do not have the money for a lawyer to dig out the answers I might need
Answer I can't speak from a divorce standpoint, but from a corporate law standpoint there is a HUGE difference between owning 50% and owning 49%. If you and your soon to be ex-husband both own the same number of shares, then you have few rights other than any rights you may negotiate in a shareholder agreement. There are some protections under the laws of most states that protect minority shareholders where the controlling shareholder is engaging in conduct that is oppressive or fraudulent, but short of that the controlling shareholder can do almost anything.
If your husband is dangling a potential buy-out as an incentive to get you to transfer 1% to him, GET IT IN WRITING.
You should not even consider transferring the stock to him unless you have talked to a lawyer and understand exactly what you are giving up.
