Representing Family Businesses in Financial Stress

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A high degree of difficulty (photo by Marilyn Swanson)

By: Donald L. Swanson

I’ve been practicing law since 1980. A major portion of my practice, throughout those decades, has been in bankruptcy and related areas of law. And I’ve represented all sides: debtors, creditors, trustees, committees, etc.

During that time, I’ve counseled hundreds of family businesses and their owners—helping each walk through a period of economic stress. And I’ve filed bankruptcy for many dozens of them.

High Degree of Difficulty

Representing family businesses experiencing financial stress is, I believe, one of the highest degree-of-difficulty areas of practice to be found. Here’s why:

  • Every unsolved legal problem they’ve ever had comes to a head and must be dealt with in some way;
  • There are few easy or simple solutions—decisions become choices between unsatisfactory alternatives;
  • When bankruptcy is needed, the decision to file is usually made with regret—often amid tears of shame;
  • The Bankruptcy Code and related laws create a complex legal system for which specialization is essential; and
  • Getting paid by a financially strapped client is a challenge and an ever-present risk.

“Hard-Knocks Rules”

In the course of representing family businesses and their owners, over four decades, I’ve learned many lessons—mostly the hard way. I call these lessons my “hard-knocks rules.”

Rewards

But this area of practice also has its rewards. I remember, in the early 1980s, helping a sole proprietor obtain a bankruptcy discharge. Nearly a decade later, he reintroduced himself to me at a public event, expressing gratitude for helping him through a difficult time and onto his feet.

A Series of Articles

So, I’m planning to publish, from time to time, a series of articles on representing family businesses who are experiencing financial stress.  And I hope to discuss some of those hard-knocks lessons I’ve learned.

I hope and trust the series will be helpful.

** If you find this article of value, please feel free to share. If you’d like to discuss, let me know.

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