CENTRE FOR MEDIATION & DISPUTE RESOLUTION ONLINE

Knowledge Base

Family Business Mediation

by Dr. Lynne C. Halem

My brother and I were just about born into the business. There was never a question of how or where we were going to spend our lives. From the time we were in junior high until we finished college, we were expected to work weekends and vacations, learning the ins and outs of the auto supply business that would in time belong to us. And, this we did, without hesitation or thought. It never entered our minds that there were other career routes, other places to live; that being groomed for the family business might not be a dream come true. We were told how lucky we were and, we believed it.

I suppose John and I assumed our children would follow our path, work in the family business, a business that had expanded under our leadership to grossing over 15 million per year with more on the horizon. But John had no children, and my two sons made it very clear from the time they were in high school that the auto supply business was not where they planned to spend their lives. Sarah was different, my daughter. To her the business offered an opportunity for her and her husband to work together in the business. To me a dream had come true. One child, at least, was going to carry forward John's and my efforts. There would be a next generation. Or so I thought.

The dream soon became a nightmare. John was by no means pleased. He wanted to sell the business to a competitor who was offering a handsome price. My two sons didn't want to be part of the business but they didn't want to walk away without compensation. My wife worried that if Sarah and her husband ever divorced, our retirement would be jeopardized, not to mention the risk to the business.


MEDIATION: A SOLUTION TO RESOLUTION
 

When family businesses are faced with internal conflict or are unsure how to handle the passage from one generation to another, the tensions become intensified, resurfacing old feelings and raising new ones. The risks are multiplied; there is so much at stake. It's one thing to end or damage a business relationship, another when it's a family relationship. For John and Peter Trumball (sic), mediation offered an opportunity to address each one's personal needs and concerns without losing sight of the individual and corporate issues. The overriding question was if either the business was to be retained or dissolved. And, if the decision was to retain the business, the questions multiplied ---under whose leadership, in what frame, with what compensation and to whom. And, and, and. The answers did not come without hard work and much reflection. Mediation was not easy. But an agreement was reached, one that did not sacrifice the business or the family.



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