WHOSE BUSINESS IS IT ANYWAY? A Case Study in Divorce and the Family Business.

• Date: 01 October 2023
• Author: Inman, Paige,Clyburn, Al,Crow, Richard,Inman, Paige^Clyburn, Al^Crow, Richard
• Published date: 01 October 2023
• Author: Inman, Paige

Meet the entirely fictional Rookie Family. Led by parents and business founders Cheryl and Wayne Rookie, Rookie Construction is a North Carolina family business that is important to the family's sense of identity, financial security, and workplace environment.

The Rookie children, Joel and Tiffany, grew up in the family business. They were given stock in the company when they graduated from high school. Neither gift included a shareholder agreement.

In 2010, Joel married Natalie without a premarital agreement. Joel and Natalie have two children. During the marriage, Joel worked at Rookie's Construction as a project manager. In 2015, Natalie filed for divorce and asserted a claim to distribute the couple's marital property.

WHAT WILL HAPPEN TO OUR COMPANY?

Ward and Smith family law attorneys Al Clyburn and Paige Inman are certified by the North Carolina State Bar as specialists in the area of Family Law. They explain that the property distribution claim filed by Natalie may expose the family business to unnecessary risk and expense.

Clyburn states, "There is a risk that the Court will find that Joel's ownership interest in the business experienced active appreciation during the marriage and that Joel should be required to pay Natalie for her share of that increase in value. In...