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Owners of privately owned businesses often encounter intracompany disputes that arise as a result of their capital and management structures. Shareholders in corporations and members in limited liability companies often serve as their company’s’ principal management level employees.

They often wear several hats which expose them to special risks and require that they abide specific duties and responsibilities controlled by state laws. Understanding these risks, duties and responsibilities is essential. HHBJS’s attorneys have decades of experience handling disputes that arise out of privately owned businesses, both as legal and business counselors and in the courtroom. They are recognized experts in this area of the law. Below, are several of the practice areas in which they excel.


Disputes arise between the owners of privately owned businesses for many reasons. Differences may arise regarding a company’s management or direction. An owner may believe that others are unfairly taking advantage of the company or its opportunities. A shareholder or member owner may simply want to cash out and retire or reinvest elsewhere. Unlike publicly traded companies whose stockholders have the ability to sell their stock on a readily available and liquid market, owners of privately owned businesses have limited options if they wish to exit their position. As a result, serious differences can arise if an owner demands change or to be bought out and there is no mechanism in place to allow that to occur in an orderly fashion. When that occurs, the owners and their companies must have competent, experienced legal counsel to navigate the myriad statutes and legal precedents that make up this potential minefield.


The owners of privately owned businesses often owe their co-owners and the company itself fiduciary duties which require that they exercise a very high degree of care and adhere to specific rules and conduct. Failing to do so can have serious and often very expensive consequences. Such fiduciary duties are especially important when an owner also serves as an officer or director or when he or she owns the majority of the stock or membership interests in a privately-owned company. Understanding the special and often complex legal issues that govern the role of a fiduciary is essential if owners are to avoid costly and time-consuming litigation. If such litigation comes to pass, it is crucial that counsel be retained to navigate the legal issues that will determine the outcome.


Derivative claims arise when a shareholder or member seeks to take action to address a real or perceived injury to the company. Such claims can happen if management has either allowed a transgression against the company to occur or failed to address it. State law sets forth specific rules regarding how and when a derivative claim can be brought by a shareholder or member, as well as what the company’s board of directors or managers must do in response. Michigan and many other states provide that attorneys’ fees can be awarded to the prevailing party, making these disputes especially risky and potentially expensive. Understanding the complex rules governing derivative claims is a prerequisite to achieving the best outcome.


Executives employed by privately owned companies often receive actual equity or so-called “phantom equity” as part of their compensation package. As a result, ending the employment relationship is usually more complicated than it is when a non-executive employee’s employment is terminated. Accordingly, care must be exercised both at the outset of such executive employment relationships and at the end. If not, claims can arise that are potentially very damaging to the company and to the departing executive.


Not all mergers and acquisitions go as planned. When a deal goes south, the attorneys at HHBJS have the experience to resolve post-M&A disputes. We have litigated post-M&A disputes involving wide-ranging issues such as purchase price adjustments, business valuations, accounting reconciliations, breach of reps and warranties, fraud, indemnification and the like. We have successfully prosecuted and defended these claims on behalf of buyers, sellers, and deal advisors.