Why Privacy Matters for Small Business Owners
By Thacker Sleight
There are often unintended consequences of divorce that can be devastating to a family and the family of every employee of a small business. For small business owners, the collateral damage of a very public divorce can be devastating to the Company and its employees.
Collaborative divorce can protect you, your business, and your employees’ livelihoods.
Privacy is one of the most critical components of collaborative divorce for small business owners. As part of the process, spouses execute a Collaborative Divorce Participation Agreement before filing a court action (in some instances, couples enter into the collaborative divorce process after a Divorce Complaint has been submitted, but this is less frequent). This Agreement provides the roadmap for your collaborative divorce process and includes the “Rules” that each spouse must follow for the collaborative process to be completed. As part of the rules, each spouse is bound to confidentiality as part of the Agreement, so privacy within your Company is one of the most critical matters.
Similarly, privacy is kept by the fact that there is no formal discovery in this process, so your employees will not receive Subpoenas to testify or produce documents in a deposition or court hearing. With these internal controls, your key employees can be insulated from your divorce process and the inevitable uncertainty. At a time when unemployment is at an all-time low in the US, small businesses have to find ways to ensure their employees stay with the Company because finding a qualified replacement may be difficult. When one is found, training is costly.
Confidentiality is also central to the collaborative divorce process. The Collaborative Participation Agreement provides that nothing shared in any session or with any professional who is part of the process can be used outside the collaborative divorce proceeding. Meaning you can share your financial information, such as Profit Loss Statements, Balance Statements, bank loan documents, tax returns, and even Quickbooks data without fear that the information will be shared publicly or with the Judge in your case. It also means that you can control who knows about the divorce. The Collaborative Participation Agreement helps the process of collecting the financial information needed for the collaborative divorce financial specialist to prepare a valuation report for your Company.
Externally, a small business owner wants to ensure that news of a divorce does not reach competitors, suppliers, and customers. Competitors will take this information and use it to their advantage with misinformation, driving customers away from the business. Customers may turn to competitors, out of worry that the Company may not be in business at the end of the divorce. Finally, suppliers may have concerns outstanding invoices will go unpaid, due to the financial impact of the divorce. Collaborative divorce protects the confidentiality of the entire divorce proceeding by limiting public information. In most cases, you will have settled the entire case before there is any public filing that would notify the public about your divorce.
Divorce is difficult for any family. When a business is involved, more than your family will be affected – every employee and his or her family will be affected. Collaborative divorce is the best choice to protect your assets and the jobs and livelihood of your employees.