By Jacqueline A. Leary (Botchman) (co-written by Gena B. Lavallee)
As published in NH Bar News (November 2019)
The end of marriage can spell the end of a married couple’s business relationship.
In family businesses, particularly those owned and operated by married couples, boundaries are often blurred between the affairs of the family and the management and ownership of the business. The finances of the family and those of the business are closely tied. Although familial bonds often lead to great success in businesses, there are challenges associated with the family business structure. Well drafted, protective, contractual provisions can help keep the family business operating and allow management and employees to remain focused on the day-to-day operations of the business, particularly in the midst of an emotionally charged divorce between the owner-operators of a company.
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By David DePuy
The New Hampshire statutes and court rules set forth the procedures for initiating and litigating a divorce proceeding beginning with the filing of a Petition by the Petitioner and an Answer by the Respondent. Thereafter, the Court rules govern the divorce litigation process. Litigation of a divorce is expensive, time consuming and can drag on for a year or longer. While the aim of divorce litigation is to obtain a just resolution of the breakup of the marriage, by opening the door to the courthouse, the parties wind up spending a lot of money contesting matters that, although felt to be of great importance at the time, are often transient, involving issues which are temporary and often increase the hostility of the proceedings. Words spoken cannot be taken back and those that are put in written pleadings are forever memorialized. Furthermore, the court rules set deadlines with regard to discovery, including the submission of interrogatories, requests for production of documents, taking depositions, production of expert reports, the automatic disclosure of a host of financial records, including 6 months of credit card statements, 12 months of bank account statements, investment accounts, retirement accounts, and other records. For business owners the automatic disclosure rule, family Court Rule 1.25-A, requires the disclosure of monthly, quarterly and year-to-date financial statements, including profit and loss statements, balance sheets for the year that the divorce petition is filed and year-end financial statements for the prior year. All such documents are to be produced within the earlier of 45 days from the service of the divorce petition or 10 days prior to the first hearing. That first hearing is usually the temporary hearing.