What happens when mom and pop divorce and neither wants to leave the business?
Given a 2007 Census Bureau estimate that about 3.7 million businesses are owned by a husband and a wife. Given the high rate of divorce, this situation is more common than many realize, The New York Times reports.
When Stephanie Blackwell and her husband of 12 years divorced in 1991 — “we just fell out of love,” she said — she wanted out of the business they had started together, growing alfalfa sprouts. He was angry, she said, and she could not deal with it. One day she drove off, but he chased her and told her to come back to work. “There was so much anger between the two of us,” she said, “but I still cared for him. I just didn’t want to be married.”
While it was tough to continue running the company with her husband, she stuck it out. They had four children together, she could not afford to leave her job, and she still respected him.
In 1998, she left to start another business, Aurora Products, which turned into a $45 million company that packages and sells natural and organic snacks. Initially, her former husband took full control of the alfalfa business but it closed 12 years later. He now works for her, overseeing construction of a new plant.
Unlike most former spouses, those who own a business together must continue to see each other regularly even after the divorce papers are signed. That can make it harder to heal, which may be a good reason to seek professional help — even if it is too late to save the marriage.
Most business partners sign a shareholders agreement to establish what happens if someone wants to sell. Married entrepreneurs, though, often do not write such an agreement.
When owners divorce, the employees, not unlike children in a divorce, often pick sides. If that happens the company can fall apart quickly.
