Are you searching for answers on how to resolve a dispute with a member in your LLC in San Diego or anywhere throughout California?  Resolving disagreements between members in an LLC doesn’t have to mean expensive and time consuming business litigation.  The Watkins Firm has more than 40 years of proven experience resolving these types of business disputes.  We take a unique approach to dispute resolution that is specifically designed to resolve the matter in a timely, cost-efficient manner while accomplishing your goals and objectives.

Negotiation, Mediation and Arbitration

It may surprise you to discover the Watkins Firm is able to resolve the vast majority of these disputes through effective, leveraged negotiation.  This is the fastest and least expensive path to protect your interests and accomplish the outcome you seek.  We work with our clients to quickly and efficiently develop a thorough, well-documented chronology of events as well as a master of the damages associated with the dispute at hand.  These tools provide the leverage needed to gain the attention of other parties and resolve the matter.  We understand the often sensitive nature of these types of business (and personal) relationships and our work often includes the preservation of existing business relationships as well as the company itself.  We have decades of experience negotiating effective resolutions and helping members in an LLC to preserve their relationships, not to mention the business itself.

In some cases, mediation and/or arbitration may be required to resolve a dispute with a member in your LLC.  Legal tools such as mediation and arbitration offer timely and cost-efficient alternatives to any trial, and our Courts will mandate this step prior to the beginning of the case.  Mediation is a private, structured, and often effective strategy for identifying potential resolutions for any dispute.  Mediation keeps your private financial and business information out of the public record.  The work of the mediator is to help each party to thoroughly understand the legal and financial implications of their present positions, options for resolution and strategies to resolve genuine, principled areas of dispute or disagreement.  The goal of mediation is to settle the matter in whole or in part.

Arbitration is mandated by many business contracts, and is a much more structured legal environment.  Think of arbitration as a sort of “mini trial.”  However, many of the superfluous motions and legal maneuvering are eliminated, as the arbitrator has the power to establish an efficient process to marshal the evidence and any testimony and deliver a decision within a matter of days or weeks.  The decision of the arbiter is final, and cannot be appealed in the vast majority of cases.  This is why it is so important to work with the experienced business dispute resolution attorneys at the Watkins Firm.  While we are experienced, proven trial attorneys with a track record of more than 40 years we care more about accomplishing our client’s goals and objectives in a timely, cost-effective manner.

Pro-Tip: “Well, if you’re going to be in a dispute, you should know what is the future for you? And the future for you is hopefully negotiation and resolution. Then if that doesn’t work, you may be in some sort of arbitration or trial, but before you get to an arbitration date or a trial, you’re likely going to be end up in a mediation or a settlement conference, meaning you’re going to have to go talk to a judge or a learned attorney about your dispute and have them try to help you resolve it.

There are a lot of common issues that can lead to a dispute between members of an LLC or shareholders in a corporation. While there are host of potential underlying issues, the one universal thing I can share after almost 40 years of experience is this: once the company starts making money, people will naturally rationalize their position to allow them to make a larger share of that money. Once a business starts making money it’s worth fighting over.

We handle this from both sides, from the drafting of an operating agreement to the actual disputes that inevitably arise. We discuss issues of power and leverage with each client. So if you don’t have a strong agreement and it’s just you and somebody else with a bland agreement, then the party with more power, more resources, the ability to fight can turn around and argue that the agreements you may have give them more rights and power. For example, you are just a shareholder investor and you don’t have that much money and you don’t have a strong agreement person in charge can say, well, I’m an officer now. And I award myself a million dollar a year salary, because I’m that great!

So, what do you do? You didn’t cover that early and you need a good lawyer to cover that now because it’s going to be a fight. This is why it is important to call us for a free consult and discuss the situation at hand and available options. You want to talk to a good lawyer, right away, who has extensive experience in these types of disputes.

For example, we had a case a long time ago, nine or 10 doctors were working together in a medical practice. And our two or three doctors were worried about something. They came to us and over that weekend, the managing members of the medical corporation took the entire practice, and moved it! They changed the practice’s phone number, location, mailing address and took all the money and assets and bank accounts. Wow. Didn’t even tell where the other partners, physicians, where they were going. They showed up for work on Monday to an empty, locked building. The practice had disappeared overnight down the street to a different facility with instructions to keep them out. Unbelievable. So knowing something might be going on is the time to come to your lawyer so that we can do things to a discover, whether there’s really something going on and B there are remedies in the law that can stop that, like we did in this case.” – Dan Watkins, Founding Partner

The Key to Resolve a Dispute with a Member in Your LLC

The key to resolve a dispute with a member in your LLC is to prevent them from happening in the first place.  Many entrepreneurs rush into business with downloaded corporate documents and, in the case of an LLC, operating agreements. This leaves LLC members, owners and investors exposed to many types of problems down the road.  If you invest a minimum amount of time and expense with our experienced attorneys up front, we help you to tailor these documents and anticipate almost every possible problem the group might encounter along the way.  When the company starts to make money, the operating agreement should clearly specify how it is to be managed and distributed (or not).

Effective corporate documents should clearly specify every process within the company as well as how to manage disputes between the members should one arise.  What are the best, proven strategies to not only resolve challenges that arise along the way, but prevent them from ever developing in the first place?

If you are interested in learning more about the most efficient and cost-effective strategies to resolve a dispute with a member of your LLC or how to prevent them from happening in the first place  we invite you to review our podcast Episode 12 – Resolving Business Disputes Part 2 as well as the strong recommendations of our clients and contact the Watkins Firm or call 858-535-1511 for a complimentary consultation today.