Business partner getting a divorce? Here’s why details are your business

A divorce affects many more people than just the two who’ve decided to split. While it is an uncertain time for the couple’s children, extended family and friends, it also can be a scary time for a business partner.“A business owner who has a partner going through a divorce has a unique set of worries because he or she has no control over what is happening,” said Jan L. Bernstein, chair of the Sills Cummis & Gross family law practice group. “There will be discovery and valuations of this person’s business that shouldn’t have implications beyond the (business partner’s) divorce. But, as a partner, you want to make sure that your privacy and the privacy of the rest of your employees is protected.”

For business owners, the value of his or her business is significant in determining a settlement with the former spouse. And a business valuation can feel intrusive to all people involved in the business.

Often, the information that is requested is proprietary. Both the partner and the partner’s spouse’s attorneys will want access to a range of business information, including business strategy, names of clients and documents proving the economic status and overall health of the company.

“This information can have serious implications to the business if it is disclosed in any way or made available to competitors,” Bernstein said. “Setting protections for confidentiality while a partner is going through the discovery process during a divorce is extremely important to the divorcing partner and the non-divorcing partner.”

Bernstein added that a confidentiality agreement between the partners is a good first step toward protecting the privacy on the parties not directly involved in the divorce. Confidentiality agreements can ensure that information disclosed about the business is not used for any other purpose than the divorce litigation.

Partners also can require that certain information, such as client names or client records, be redacted from business documents.

While business partners may expect to go through booms and busts, hirings and firings, and client wins and losses together, in reality, they also are bound to go through marriage and divorce together, too.

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