By L.M. Sixel
WWR Article Summary (tl;dr) How are partnership troubles similar to marital disputes? Houston lawyer Ashish Mahendru counts the ways.
Business partnerships, like marriages, are built on trust, friendship and shared financial goals, says Houston lawyer Ashish Mahendru.
He has built a legal specialty navigating disputes between business partnerships, which can turn sour if one partner feels cheated when company funds go missing or work duties aren’t divided equally.
The Chronicle sat down with Mahendru to talk about what happens when the bonds are shattered and his edited remarks follow.
Q: You call yourself a business divorce lawyer. How are partnership troubles similar to marital disputes?
A: In a family partnership — a marriage — you can walk in and say I don’t want to be with that person anymore and terminate the relationship. There is no corresponding right to go to a judge in a partnership dispute to ask the court to throw your partner out. You can’t just say there are irreconcilable differences. We have to create legal risk to eject them — remove them, buy them out — and regain control of the business.
Q: Do you typically step in before problems erupt?
A: Sometimes. But most of the time the dispute has erupted and we get called to figure out how to contain the damage. It could be raiding the till, starting a competing business, poaching employees or stealing company trade secrets.
Q: What often causes problems in the first place?
A: They did not properly and thoughtfully express the expectations of each other when they founded the business. It is imperative not to just talk about the rosy picture but what can go wrong and how the company will address the problems. A company agreement is like a prenuptial agreement.