Partnership Disputes on the Rise
When the economy is at, or nearing, its peak and cash flow is rich, partnership issues often heat up.
A loss of trust – for whatever reason – can createthe perception of unequal benefits (is onepartner disgruntled by the others’ earnings?)and/or a change in values and work ethic (is onepartner coasting while others push for innovation and adapt to changes?). Control disputes oftenresult from a lack of confidence in financialreporting or suspected mismanagement of business operations.
It’s no secret that the numbers are staggering: nearly 80 percent of business partnerships ultimately fail.
These broken partnerships are expensive: failures can cost shareholders, employees, and customers thousands, even millions of dollars.
Whether control disputes result from mismanagement or mistrust betweenco-ownership, an independent verification of financial performance, placement of outsidecontrols, and improvement recommendations are necessary to save the business.
“The goal is always to preserve, protect and, where appropriate, enhance the value in time of crisis,” said Douglas Wilson. “Partnerships area source of revenue; protecting that revenue is just a macro version of protecting the company’s cash register.”
Through its 30 year history, DWC has been through multiple cycles of control dispute resolution working with owners and other professional advisors to successfully implement the controls and reporting necessary for a resolution.