AMM Blog

Welcome to the AMM Law Blog, a tool to help you keep up to date on current legal developments over the broad spectrum of our practice areas.  We welcome your comments and suggestions to create a dynamic forum that will be of interest to readers and participants.

Business partnerships are like marriages; sometimes they work great from the start and before you know it you are celebrating a 25 year anniversary with a big party with all of your clients and customers in attendance.  And sometimes; not so much.  For reasons unique to business relationships and the personalities involved, business partners sometimes find they can no longer function together, no longer share the same vision, and can no longer tolerate sharing the responsibilities or benefits of common ownership.  We refer to the painful and expensive process of separation as “business divorce”.    

As in any divorce, emotions run high. The natural instinct is to assess blame and recruit those close to the business to one “side” or the other.  Such recruiting efforts implicate disclosure of sensitive, often damaging information with the idea that inflicting pain will induce a desired course of conduct.  Rarely is such an ill-conceived plan rewarded with success.

The reality is that preservation of the business as an asset should be the primary concern.   Often that means preserving the opportunity for the business venture to continue operations without interruption, modification or additional added pressures attendant to disharmony.   Whether the business can be divided according to an acceptable plan among the shareholders, sold as a going concern, or liquidated in an orderly fashion, continued successful operations are essential to return on the shareholders’ investment. 

Successful operations are a function of several factors.  First and foremost, management, employees, contractors and staff must be confident in the direction of the entity.  Public disclosure of disputes among ownership breeds workforce instability, discontent, mass departure and potential competition on the part of key employees with the capacity to do so.   

Customer relationships must also be protected.  Instability will most certainly cause a client to search for an alternative provider of the same product or service.  A client will not risk their own business by not addressing the potential impacts of instability in yours. 

The bank can become concerned as well.  Lending relationships are complicated.  Often businesses obtain term loans or lines of credit which must be “rested” (reduced to zero) from time to time.  A borrower’s options upon maturity can be limited and, notwithstanding a long and happy banking relationship, the bank may not be required to extend credit on the same terms and conditions.  The bank may even take the position, under certain circumstances and certain loan agreements that the bank is insecure as a result of dissention thus forcing very difficult financial decisions.          

Finally, in all likelihood, public disclosure of internal disputes results in the parties becoming entrenched in their respective positions such that a future together is impossible.  Even a sale under such circumstances is likely to net less than market as a buyer is quick to assert pressure on one shareholder or the other in an effort to negotiate the best deal.     

Really no good can come of a public airing or an internal dispute.  Just like a married couple should not publicize their grievances on Facebook, business owners should take care to keep their disputes in house while seeking resolution through any number of mechanisms – at least until it becomes apparent that such resolution is not possible.  Even then, the minimum amount of information necessary to effectuate a course of conduct should be disclosed in the least applicable public way.    

As family law attorneys and parties to custody orders can attest, shared custody and co-parenting arrangements are often fraught with ongoing tensions, stress and conflict.  Using the court system to litigate smaller disagreements in the aftermath of a custody order is inefficient, costly and time-consuming.  In addition to the burden it places on the Court system, it is a strain on not only the parents, but most importantly, the children who are subject to the order.  Fortunately, a common sense alternative is soon returning which can mitigate some of the strife of custody disputes in the future.

On March 1, 2019, the Parenting Coordination program, which was terminated in May 2013, is being reinstated by the Pennsylvania Supreme Court. The rule allows the Court to appoint a parenting coordinator to resolve parenting issues arising from the final custody order issued in the case. The rule clearly establishes that parenting coordination is not intended for every case. Coordinators will not be appointed where there is a protection from abuse order in effect between the parties to the custody action, a finding by the Court that a party has been a victim of domestic violence by a party to the custody action during the case or within 36 months of the filing of the custody action or where a party has been the victim of a personal injury crime.

A parenting coordinator will be appointed for a period not to exceed 12 months; however, this may be extended. The rule also sets certain qualifications that must be met prior to the coordinator’s appointment. Once appointed, the parenting coordinator will have the authority to recommend resolutions to the court on specific custody related issues including, but not limited to: deciding on locations and conditions for custody exchanges; temporary variations of the custody schedule due to special or unique events and circumstances; and any school-related issues.

There are, however, specific areas into which the coordinator is explicitly prohibited from making any decisions such as: changing legal or primary physical custody; changing the custody schedule (a permanent change, rather than a “temporary” one); changing the child’s residence or their relocation; financial issues; major decisions affecting the health, education or religion of the child; and any issues limited by the appointing judge. 

Under the new rule, after giving the parties or their counsel the appropriate notice and the opportunity to be heard on the issue(s), the coordinator submits to the court, and serves copies on the parties or their counsel, a written summary and recommendation within two days after hearing from the parties on the issues. An objecting party has five days from the service of the summary and recommendation to file a petition appealing the coordinator’s recommendations on all or specific issues. If neither party appeals the recommendation, the court undertakes one of the following options: approve the recommendation and make it an order of court; approve the recommendation in part and hold a hearing on the remaining issue(s); remand the recommendation back to the coordinator for more specific information; decline to enter the recommendation as an order and conduct a hearing on the issues. If a timely objection is made and a hearing is required, the recommendation will become an interim order pending the hearing and issuance of a further order by the court.

Custody matters are typically the most high-conflict and costly type of family law cases. By reintroducing the amended parenting coordination rule, the Supreme Court has returned a functional tool to the courts, attorneys and litigants to expedite custody disputes and reduce stress and costs for all parties involved. The hope is that this additional tool will assist all parties involved in achieving the best interests of the children in custody cases.

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