Understanding Corporate Governance Disputes Or ‘Business Divorces’
Although business owners recognize the value of professional legal counsel in business formation and related startup matters, not everyone is aware that the assistance of a competent lawyer is equally critical in the dissolution of a business partnership or corporation.
In addition, few realize that the same emotions and factors that drive spouses to marital dissolution often drive business partners to separate as well. As with almost any “divorce,” the fair division of assets and debts is a paramount concern. What trade secrets, business processes, ideas, client lists or other assets does the departed party have a right to take? What “premarital agreements” or noncompete agreements are legally enforceable?
At Watrous | Goodwin | Reha, we provide creative and highly experienced counsel and representation in corporate governance disputes involving directors, shareholders, partnerships, limited liability companies (LLCs), corporations and other parties. We can put ’em together and we can take ’em apart.
One of our founding attorneys, John F. Reha, has more than 35 years of experience in this area of law as well as related areas such as covenants not to compete, unfair competition claims and intangible asset protection. John not only represents clients as an advocate in these matters, but has also been requested by other attorneys to bring his extensive knowledge in this area to their assistance, serving either as special co-counsel or as an expert witness.
What Is The Duty Of Loyalty And Trade Values?
There are nonstatutory protections for intangible assets available to businesses under state common law. Among these are the doctrine of the duty of loyalty, which certain employees owe to their employer, as well as the doctrine of misappropriation of trade values or business values. Such values are considered information that is not itself secret, but that is nonetheless valuable and represents the manifestation of the owner’s labor, time or expense, or which would be saleable for money.
These doctrines may provide substantial protection for a business owner, but consulting with an attorney such as John F. Reha who focuses on intangible information protection matters is highly recommended. For instance, the duty of loyalty may not apply to all employees, and qualifying nonsecret information such as a trade value depends upon several factors that competent counsel can analyze.
Colorado’s Uniform Trade Secrets Act (UTSA)
In addition, Colorado has adopted the Uniform Trade Secrets Act (UTSA), which sets forth requirements for information to be deemed a trade secret, including a requirement of measures by the owner to protect confidentiality. Colorado also has criminal statutory provisions governing theft of trade secrets.
State law clearly places a burden on businesses to protect information, capital and intangible assets. Many fundamental issues exist in every competition restriction question. Management and ownership must devote extra care to the creation of workable, enforceable protection systems within Colorado’s unique legal framework.
Likewise, if employees have been terminated or want to quit and start their own business or go to work for a competitor, they need to be aware of Colorado’s unique legal setting when planning their exit and transition strategies. Waiting until the last moment to contact knowledgeable counsel in these situations may prove fatal.
Preventive Measures Can Save Your Business From Costly Litigation
Effective document and system preparation and preservation measures, as well as effective pretermination strategies, are often the key means by which an employer may effectively protect itself from post-termination competition or by which an employee will be emancipated to pursue his or her profession with minimal risk of liability.
To learn more, schedule a consultation with our experienced corporate litigation attorneys for governance disputes and business divorces. Call Watrous | Goodwin | Reha in Littleton at 720-594-7400 or complete our online form. Our firm serves clients throughout the state.