“Business Divorce? Separating Amicably Through Mediation”
By Stanley Zamor
In a business dispute, conflict occurs over vague contract provisions, verbal agreements/promises, issues with or within the labor force or business partners no longer able to coexist. Similarly, to a family divorce, where once committed partners find themselves separate and apart; shared life visions change, commitments wean and trust is lost, business partners can also find themselves needing to end their business relationship (i.e. divorce). Oh yes, business partners can go through an emotional arduous separation and breakup just like a married couple. Some contend that business disputes are less emotional than personal disputes; I beg to differ. The following is a condensed look at a business divorce and how mediating resolved varying unspoken issues that yielded an amicable resolution.
An Introduction
I recently mediated a case between business partners severing their short-term business relationship, and long term friendship. The once friends, entered an informal agreement to build and operate a trendy restaurant-lounge. The wealthy Plaintiff agreed to fund and facilitate the construction, while the Defendant (a foreign restaurateur) was the named owner, and would run/control the restaurant-lounge. The construction was never fully completed, as random changes/upgrades by the Defendant led to permit issues and massive delays. The landlord subsequently evicted the Defendant for not opening on time and released whatever bond to the Defendant. The Plaintiff, sued for the $200,000.00 he paid as the construction “factoring” company. Factoring is a financial transaction and a type of debtor finance whereby a business sells its invoices (i.e. accounts receivable) to a third party (called a factor) at a discount. It is common business practice to factor receivable assets to meet present and immediate cash needs.
The Positions
The Plaintiff’s tone/position was, “I thought I was helping a friend start a new business. All the changes and additions were bound to hurt him, but he would not listen. I just want to recoup what I put in, as agreed, and end this.” The Defendant’s tone/position was, “You hurt me more than you helped me. So, I owe you nothing more than what you’ve already received. The rest of the bond money is mine…” Although they were exhausted from three years of ligation, they refused to yield.
The Resolve
The parties grew to hate each other while deep family ties were torn. My approach/technique was simple; I had each party tell me “their story” … Their attorneys looked bewildered as the Plaintiff and Defendant offered perspectives never shared, broken friendship ties, and ideas of how to move beyond litigation. Five hours later, there was a signed agreement. Mediation worked because the parties used their own voice to express themselves, thereby accepted the other’s perspective. Although a trial offers the opportunity to claim their legal rights, mediation provided them with what they needed, the opportunity to created value in a self-created resolution and have closure.
Stanley Zamor is a Florida Supreme Court Certified Circuit/Family/County Mediator & Trainer and Qualified Arbitrator. Mr. Zamor serves on several federal and state mediation/arbitration rosters and has a private mediation and ADR consulting company where he mediates/arbitrates and facilitates workshops. He regularly lectures on a variety of topics from ethics, cross-cultural issues, diversity, bullying, and Family/Business relationships.
szamor@i-mediateconsulting.com
www.i-mediateconsulting.com
www.LinkedIn.com/in/stanleyzamoradr
(954) 261-8600