But What About the Business? M&A Advice for Family Law Attorneys
Ken Luer is a partner in the Business and Corporate Law Group of Ervin Cohen & Jessup LLP. Ken has over 30 years of experience serving entrepreneurs and family-owned businesses in forming, restructuring, financing and selling their companies, and handling a full range of their business transactions, contracts and strategic commercial relationships. Ken has a particular specialty in advising family law attorneys on how to monetize a spouse’s interest in a valuable closely-held company as part of a marital property division, and frequently speaks and writes on this subject.
For many married couples in California, a closely held business is their most valuable community asset. They may be co-owners of the company, or one spouse may be the record owner with the other having a community property interest. In either case, whether or not both spouses have been active in the business, it is likely that only one spouse (the "Remaining Spouse") will remain with the business following their divorce.
So, in addition to the many highly charged family law issues such as child custody, support, and division of personal items, there arises this critical problem: How can the "Departing Spouse’s" interest in the business, after its value has been determined, be turned into cash? The answer is further complicated by this reality: The business is not just an asset to be divided, it is also the principal income source for the Remaining Spouse and for spousal and/or child support payments to the Departing Spouse.