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 [email protected] Thank you.

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