We were introduced to a family business by the existing bank. The business was in its third generation and owned by the family, with some of the shareholders working in the business and some of the family members with little involvement other than as shareholders.
Our role was to create a solution for an ongoing dispute between the family members.
Having interviewed all shareholders and all family shareholders we identified multiple disputes:
- Within the working shareholders there was a dispute regarding the seniority of the roles relative to the shareholding percentage
- One of the working shareholders wanted to pursue other interests outwith the company
- The working shareholders wanted to invest in the business to take advantage of the demand from existing and new customers
- The non-working shareholders wanted higher dividends and less investment
- Two of the siblings had fallen out no longer spoke to each other
It was a classic family dispute.
We worked closely with the company accountants and lawyers and over a period of time, we eventually resolved matters by:
- Agreeing to purchase shares form certain shareholders
- Produced a valuation of the company and the shares
- Developed a strategic business plan
- Introduced a bonus scheme for working shareholders
- Used excess cash in the business to repurchase shares
- By repurchasing shares, existing shareholders percentage holdings increased
- Worked with the bank to increase the working capital facilities significantly
- Agreed a dividend policy that kept sll shareholders happy and still allowed investment in the business
- Pursued the growth strategy
The company has moved from strength t strength as result of these issues which had clearly been holding it back for a number of years.
Craig Alexander Rattray has been retained in an ongoing advisory role.
- There were many successful outcomes as can be seen from above
In my view, the most important was that it brought the family back together