How do business lawyers celebrate Halloween? They do it with horror stories of their scariest legal moments. What is important to note is that these scream-worthy nightmares could have been avoided with a little prior planning (and a whole bunch of candy (because planning is better with candy)).
So, gather around with a cup of hot cocoa ( or your drink of choice) while we pull out some ghost stories of our legal past.
Something as innocuous as not having the proper legal documentation can turn into something quite ghastly. We get it, contracts can seem scary and have the reputation of being antagonistic, confrontational, and contentious. But alas, without a contract, you are setting yourself up for the trick without the treat. Contracts can be a friendly ghost- there when you need them but not going around and scaring everyone all the time.
Just ask one very kind woman who had become a recent widow and found herself being attacked by nasty goblins (her late husband’s business partners). Our widow now found herself a business owner mired in years of litigation by the relentless haunting for her late husband’s partners.
What could be so bad to end up in years of litigation? Well, the business must have been complicated, right? Not necessarily. Something as simple as not having an updated client agreement, a shareholder’s agreement, an operating agreement, or forgetting to remove an officer or director from a secretary of state filing whom you got rid of long ago can all result in some pretty slimy situations.
In a case that lasted ten ominous years (yes, ten), our widow had the company her husband owned half of for almost thirty years taken out right from under her from the business owner’s surviving partner. The paperwork surrounding the company was so fragmented and outdated that it became a literal “he said she said.” In the end, my client prevailed, her legal fees were such that her victory was more bitter than sweet. That was a difficult case for me, because the other side was awful, the widow was sweet, and the paperwork was poor. In other words, it all could have been prevented. That one will haunt me for years to come.
We hope this story won’t give you nightmares. We have just the remedy for that: give your business a treat by getting the right agreements in place.