Mediating Business Disputes

Posted by Hecht Walker, P.C.
Posted on October 31, 2017


If parties to a business dispute want to achieve a resolution through mediation, then the parties have to leave some hostile feelings in the past, work creatively with the mediator to find solutions, and be realistic about the importance of the future business entities involved. There are key principles to remember in any significant business disputes between parties with longstanding relationships.

First, business disputes, especially with partners or other significant shareholders, are ripe with emotional stress. Like a regular divorce, sometimes business divorces incur significant emotional stress from a perceived lack of respect and a violation of trust on one side or the other or both. These hard feelings can make it difficult to resolve business disputes. Often, however, once the mediator and the parties recognize that a real business decision has to be made, then the parties maintain a significant opportunity to find common ground.

Second, the success of business entities in the future may be a key to resolution. While this is not true always, often it is a critical factor to the resolution of a business dispute. If there has been a usurpation of corporate opportunities, i.e., the taking of business opportunities, a diversion of assets or a transfer of customers or clients, often one of the parties wants to kill the business of the opposing party that gained the clients or assets. Many times, a party may say that they have alternative income and can afford to take this fight all the way. Other parties have determined that it’s in their best interest to find a resolution at mediation. In mediation, the successful revenue stream of a defending party may be the key to resolving the business dispute depending on the type of resolution gained. A resolution may include a percentage of the revenue stream being brought to another party no longer in charge of a particular client base or assets. However, the parties must find common ground and oversight to allow this to happen.

Confidentiality and non-disparagement may be a key to resolution as well. Also at mediation, some expression of a confidential apology or disappointment might be a key to letting the emotions out of the business decision. However, thereafter, confidentiality and non-disparagement may be significant keys to resolving a business dispute, just like any other dispute that affects businesses and principals’ reputations. The parties may or may not agree to such provisions, but these provisions may be a key to achieving better economic bargains for the side giving in on confidentiality and non-disparagement.

Lastly, verification of financial condition may be an important factor to resolving a business dispute as well. Once trust is lost, one party will likely seek to ensure a verification of financial condition of the other party. While this may or may not be critical if the business is being audited or subject to public regulation, often between closed corporations or limited liability companies, this type of accounting may be critical to resolution.

While these considerations are just a few of the ones to be considered in the successful mediation of a business dispute, they are neither exclusive nor necessarily inclusive for your situation. If we can assist you either mediators, arbitrators or lead counsel in a matter, we would be honored to serve. Please feel free to contact us at (404) 348-4881 or at scarlet@hmhwlaw.com. Thank you.

How To Save Time, Fees And Liability Exposure For General Counsel Working With Outside Counsel In Litigation And Arbitration Matters

Posted by Hecht Walker, P.C.
Posted on September 28, 2017


Hecht Walker, P.C. works on a daily basis with General Counsel on litigation and arbitration matters and finds certain critical truths to avoiding liability exposure for the GC and his/her company and excessive fees. We have been lead counsel in over 300 Trials in Court/Arbitration Settings and 1000 Court Hearings.

Here are our tips in short order:

1. If there is a positive written anticipation of litigation evaluation or at least a very clear demand letter threatening litigation, the GC should have the company/client team draft comprehensive “Work Product/Attorney-Client Privileged” Chronologies, a Witness List and an Inventory of Documents, Communications and Tangible Evidence Addressed to Outside Counsel. This work will reduce expensive outside counsel hours and identify legal issues and potential exposure areas early.

2. Make an early deep dive into e-communications, chats and social media entries before Answering a Complaint, Responding to Interrogatories and making a decision on Litigation/Trial vs. Settlement Strategy. You may find communications that will determine whether you want to resolve the case before discovery or whether you want to defend through the summary judgment stage or all the way through trial.

3. Don’t mix the Transaction Counsel with the Litigation Counsel. Most likely, the Transaction Firm has a conflict if the Transaction is being litigated. Even with an indemnification agreement, get an outside litigation firm and ask the transaction firm to pay for it if necessary. See St. Simons Waterfront LLC v. (Firm Name Omitted) 293 Ga. 419 (2013) State Bar rules and Regulations rule 4-102(d), Rule 1.10.

4. Make sure someone is checking the Criminal Ramifications in taking certain strategies. If you demand your outside counsel to threaten arrest if payment is not made or agree to withdraw criminal proceedings to resolve a case without the consent of the prosecutor or the judge in the criminal case, you may have just become a party to a crime. OCGA 16-10-90; OCGA 16-8-16. Also, you may have violated a bar rule. State Bar Rule 4-102, RPC Rule 3.4

5. Beware sanctioning requests by outside counsel of misrepresentative discovery answers. Just because outside counsel takes the shortcut, a GC’s approval may result in sanctions for both attorneys, even if unknowing approval occurs. Your emails may be in front of a court one day, even though you thought they were privileged. Certain exceptions including the crime-fraud exception may open up those communications to the Court and your opponent. See Ford Motor Company V. Conley, 294 Ga. 530 (2014) See Pihlman v. The State, 292 Ga. App. 612 (2008); Begner v. State Ethics Commission, 250 Ga. App. 327 (2001)

If you follow these tips, it will help you to reduce your conflicts, attorneys’ fees and personal liability exposure as a General Counsel. We work with our General Counsel at Hecht Walker to try to ensure that our GCs do not take an accidental step toward company or personal liability. Our firm’s initials are HW, which doesn’t just stand for Hecht Walker, it also stands for Hard Work and Honest Work.

This Article is by Greg Hecht, Principal at Hecht Walker, P.C. He has been designated as Legal Elite in 2016 for Business and Employment Matters, a Top 100 Attorney in his fields of practice by International Who’s Who, a past Super Lawyer, and is AV Rated by Martindale Hubbell. Hecht Walker PC has offices in Atlanta at 3340 Peachtree Rd NE, Suite 1530 Tower Place, Atlanta, GA. 30326 and at Eagle’s Landing at 205 Corporate Center Dr., Stockbridge, Ga. 30281. Their phone number is 404-348-4881. Greg’s email is Greg@hmhwlaw.com and the website is www.hechtwalker.com