Embezzlement can have a devastating impact on an organization. Especially in cases where the person embezzling is in a position of authority, their financial misconduct could cause extensive damage. Not only could the organization itself suffer, but the partner(s) who didn’t steal could also experience negative consequences. Embezzlement can impact the value of the company and the revenue it generates, which can then potentially reduce what the leaders running the business receive in pay.
Those who have uncovered warning signs of embezzlement might want to end their working relationship with the party stealing from their shared company. Is a business divorce or buyout the only available option?
Buyouts can keep the issue private
Neither the business itself nor the partner taking action over the embezzlement is to blame for the financial misconduct of the other partner. However, controversies can still cause significant brand damage. Additionally, litigating can prove costly. Provided that a partnership contract includes a buy-sell agreement, invoking those protections can be the best option available after discovering theft. Buying out a partner can keep the entire matter private.
It may even be possible to reduce the amount of compensation provided for the transaction based on the financial impact of their conduct. Business partners anticipating a business divorce or partnership buyout may need assistance reviewing their contracts and the buy-sell agreement to navigate the process as effectively as possible.
Discussing embezzlement and other forms of financial misconduct with a legal professional can help business partners limit their exposure. No one should have to continue working with a partner who steals.