Tales of Dissolution – Breaking Up A Business Partnership
Recently, I ran into my old friend Robert from high school. We caught up over a couple of slices of pizza, or rather I ate and Robert served me. It’s odd how sometimes the people you think are the most together end up the furthest from it. Robert began telling me about his life and as I listened, I became more and more shocked how he ended up as my waiter. Here’s his story:
Robert is 29 years old. He lives with his parents in a small two-bedroom house located in a quiet California suburb. After splitting with his partner of six years Robert was forced to move back in with his parents. His partner got the better end of the deal.
Prior to his decision to move in to his parents’ home, Robert had a mounting pile of debt from his failed business. Creditors were constantly hounding him and he was having trouble keeping up on not only his bills, but his life in general. His credit cards were maxed out and his back pain, which was formerly just an occasional annoyance, had grown to intolerable levels. Having no health insurance, Robert was reluctant to see a doctor and instead tried to live with it, hoping it’d eventually go away on its own.
About the only good thing Robert had in his life was his 2 year-old son Kenny. However, Robert’s visitation rights only allowed him to see Kenny on weekends.
Not wanting to declare bankruptcy, Robert began pawning off his possessions to make good on some of his bills. One day after having sold his beloved 1971 Camaro to a buyer who had responded to an ad he placed in the classifieds of his local newspaper, a sharp pinching pain suddenly ran through Robert’s back. Robert fell to the floor and crawled slowly to a nearby payphone. The pain was excruciating and after much self-deliberation, Robert picked up the phone and called for an ambulance. The doctor diagnosed Robert with a herniated slipped disc required immediate surgery. Now with medical bills added to his debt, Robert works seven nights a week as a pizza delivery man and regularly moonlights as a security guard.
Sounds like a nightmare of divorce, huh? Just another reason why marriages are bad and can leave a person destitute and working at some menial job. Well that maybe true, but Robert’s divorce ended quite amicably. In fact his ex-wife never sought child support from him and they are still on good terms.
The split referred to in Robert’s story that started this all was that between Robert and his former business partner. They owned a pizzeria together and after six years, their differing views on how the business should be run ended with them dissolving their business partnership.
According to Robert, he made a number of mistakes. First, he believed his partner to be his best friend and thus relinquished a majority stake in the business to his partner. Second, and possibly worst, Robert allowed his partner to draw up the contract which he signed without reading. According to Robert, this resulted in him incurring much of the debt for the business. Third, dissolving his partnership was an expensive process because the tension between both parties required him to contract an attorney.
Robert isn’t alone. According to the LegalMatch statistics, business dissolutions make up a large majority of the cases received.
Robert, like many people, forgot that a business partnership is much like a marriage. You have to make sure you end up with the right person or you might get taken for everything when it all falls apart.