Breakup dos and don'ts by ProQuest

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									                                                                                            Finance
Breaking up is hard to do — so have a plan                                                                                                                                                                     Breakup dos and don’ts
                                                                                                                                                                                                               ■  Do decide how decisions will be made.
A legal roadmap can avert costly problems in the event of a split                                                               update it periodically as events change.                                       ■  Do address what to do if an owner dies,
                                                                                                                                     “If the case goes to court, the partners                                  gets disabled or leaves the company.
               BY MARTIN C. DAKS                                    Legal Issues                                                could lose control,” Hays said. “In New Jersey,                                ■ Do set forth how each party’s ownership

WHEN TWO OR MORE people get together to                                                                                         judges have a lot of power and can wind down                                   interest will be valued.
start a business, the odds are that they’ll quick-    format — will help to determine the kind of                               and liquidate a firm. But judges generally do                                  ■ Do include noncompete clauses.

ly address concerns like the money or other           agreement that’s needed, she said.                                        not want to be in the position of running a                                    ■ Don’t make it easy to break up the company.

assets each stakeholder will contribute, and               But the important step is to execute it as                           business themselves.” ◆                                                                                                   — Martin C. Daks
other ownership and compensation issues.              early as possible, before trouble strikes, and to                                                        E-mail to mdaks@njbiz.com
But even as they’re preparing to launch their
new business, the partners should also be
planning how they’ll handle a breakup, busi-
ness lawyers say.
       “You start a business hoping that it will
last forever,” said Raymond Felton, a co-man-                                                                                                                                                                      BANKS                        130
aging partner with the Woodbridge law firm

                                                                                                                                                                                                                                                                      A
Greenbaum, Rowe, Smith & Davis LLP. “But it            733     oak valley savings bank                                                                            Responsible Lending Corporation
doesn’t always work out that way, and in this                    Station Ln Sommerville ....................................... 908 555 0920                        Blew Cr Highland Park ....................................... 732 555 9856
weak economy, we’re seeing more quarrels               846                                                                                                        Retiree Services Company .................................. 732 555 4646
                                                               Omnipresent Savings Bank
between owners that lead to splitting their                      Notting Dr Metuchen .......................................... 732 555 7498                      revive community bank
companies apart.”
       A business split can be driven by a failure,
                                                               Pacific East National Bank ................................... 732 555 2031
                                                               Pine Lane Bank & Trust
                                                                                                                                                                    Branches
                                                                                                                                                                      Great Plains Dr Green Brook .......................... 732 555 4649
                                                                                                                                                                                                                                                                      B
or one partner may just lose interest in the           500       Cranbury Rd N Brunswick .................................. 732 555 6695                              Business Dr E Brunswick ................................ 732 555 3098

                                                                                                                                                                                                                                                                      C
                                                               PremierOne Credit Union                                                                            RiverJoin Asset Management
company, said William R.Watkins, a partner             674       Holbrook Dr Colonia .......................................... 732 555 6438                        Button Cove Edison ........................................... 732 555 9894
in the Summit office of law firm Lindabury,                                                                                                                       Ronsmith Partners, Inc.
                                                       092     Professional Bank ................................................ 732 555 1689
McCormick, Estabrook, & Cooper P.C.                                                                                                                                 Ayer Av S Brunswick .......................................... 732 555 7819
                                                               Prime Loan Savings Bank
       In one case, a New Jersey-based residen-
tial and commercial developer was owned by
                                                       040

                                                                             PERSONAL BANKING
                                                                                                                                                                  rooted community savings
                                                                                                                                                                    Bennington Place Somerset ................................ 732 555 9480                           D
two unrelated families, and operated prof-                                                                                                                        R W Asset Management
                                                       700
                                                                            COMMERCIAL BANKING
                                                                                                                                                                                                                                                                      E
itably under its founders for many years, said                                                                                                                      High St Freehold .............................................. 732 555 7819
Felton, who worked on the case, “but when the          000                                                                                                        Safe Savings Bank
                                                                                                       SINCE 1869
owners’ sons took over the company, they                                                                                                                            Burr Av Raritan ................................................. 908 555 7194
                                                       146       Rues Rd Edison ................................................. 732 555 8635                    SaySo Personal Savings Bank
started to squabble, the business suffered and
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                                                               Principle Park Trust                                                                                 Porter Rd Piscataway ........
								
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