April 19, 2024

Small-Business Guide: When Couples Divorce but Still Run the Business Together

The two met in the late ’80s, in law school, and the relationship blossomed in the early ’90s at the firm — Ventura, Ribeiro Smith — where Mr. Ribeiro was essentially the chief executive. They were married in 1998, and soon after, Ms. Calistro took a more active role in running the company’s operations. Together, they built the business into what is now a 50-person operation with an emphasis on civil litigation.

But while the business grew, their home life started falling apart. Mr. Ribeiro and Ms. Calistro divorced in 2006, and suddenly, the former spouses had to make a choice: Do they continue running the business together or should one of them leave? (Ms. Calistro was not an equity partner at the time of the divorce; she is now.)

“People said, including both of our lawyers, that we shouldn’t work together,” Mr. Ribeiro said. “But we talked in an office for two hours and decided we should try to make our business relationship work.”

Given a 2007 Census Bureau estimate that about 3.7 million businesses are owned by a husband and a wife. Given the high rate of divorce, this situation is more common than many realize. This small-business guide, based on the experiences of owners like Mr. Ribeiro and Ms. Calistro, offers suggestions on making the best of a difficult situation.

“We created the business,” Mr. Ribeiro said, “we created the structure, and we had a team that counted on us.” Six years after signing the divorce papers, the business partners say they are working together happily and the firm is in good shape.

RESPECT IS CRUCIAL When Stephanie Blackwell and her husband of 12 years divorced in 1991 — “we just fell out of love,” she said — she wanted out of the business they had started together, growing alfalfa sprouts. He was angry, she said, and she could not deal with it. One day she drove off, but he chased her and told her to come back to work. “There was so much anger between the two of us,” she said, “but I still cared for him. I just didn’t want to be married.”

While it was tough to continue running the company with her husband, she stuck it out. They had four children together, she could not afford to leave her job, and she still respected him.

In 1998, she left to start another business, Aurora Products, which turned into a $45 million company that packages and sells natural and organic snacks. Initially, her former husband took full control of the alfalfa business but it closed 12 years later. He now works for her, overseeing construction of a new plant.

Ivan Lansberg, co-founder and senior partner at Lansberg Gersick Associates, a consulting firm in New Haven that advises family businesses, also emphasizes the importance of respect. Unfortunately, he said, many relationships become so damaged — especially if one person has cheated — that trust and respect are not possible.

To Mr. Lansberg, it all depends on open communication, predictability (people have to do what they say they are going to do), and consistency (they have to follow through even on bad days). But there also has to be some compassion. “You have to be able to put yourself in the shoes of the other person and empathize with what they are going through,” he said.

GET HELP Unlike most former spouses, those who own a business together must continue to see each other regularly even after the divorce papers are signed. That can make it harder to heal, which may be a good reason to seek professional help — even if it is too late to save the marriage.

Terri Allen still cared for her husband when the two separated in 2010 — they are not yet divorced — but there was so much anger that they could barely communicate. That made it difficult to continue running their accounting firm, which is based in Toronto.

The couple decided to hire a therapist to help them sort through their problems so they could continue working with each other. They found someone who specializes in Imago Relationship Therapy, a type of therapy that helps people communicate. “It helped us learn how to talk to each other in a calm and rational way,” Ms. Allen said.

Article source: http://www.nytimes.com/2012/12/06/business/smallbusiness/when-couples-divorce-but-still-run-the-business-together.html?partner=rss&emc=rss

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