How to Sue Your Sibling Business Partner

August 31, 2022Insights

Business partnerships can be challenging. Family matters can be troubling. When you put the two together, things can get…interesting. And when it gets contentious between sibling business partners, emotions kick into high gear. Childhood relationships and behaviors don’t necessarily turn into healthy business partnerships. The tension escalates and the nuclear option becomes a very real possibility.

Any business partnership can go south. In fact, many do—and sometimes, things between partners get so bad that they lead to lawsuits. It’s not an ideal situation, but it does happen. Suing a family member, though? That’s a different story with major ramifications.

If you are reading this article, then you are probably going through a similar scenario. Regardless of who’s right or wrong, any feelings you have are valid. So, if you really want to take the legal route…


There’s the Extreme Option

Go nuclear and blow it up. Bring it down. Watch it burn. There is no delicate way to sue a family member, only a reckless and unapologetic one.

If you’re going to do it, do it. Just recognize that there is likely no turning back to repair the relationship, and the effects will be felt far beyond finances.

Birthdays. Weddings. Thanksgivings. Cousins. Nieces. Nephews. Newborns. And, of course, employees of the ill-fated business who may or may not be family members too. Suing your sibling is a big decision – and once done, you can’t undo the damage to the family.

In a family business, the extreme option of a sibling lawsuit is the equivalent of a plane crash. Neither the business nor the relationships will survive. It will effectively end the family business, which often represents a legacy lost.


There Are Other Options

It’s always helpful to take a step back and try to see the big picture, especially when emotions run high and exchanges get heated. The good news is you absolutely do not need to sue to settle the situation. Consider instead:

The Bumpy Landing

A bumpy landing is different than a flat-out crash. On the way down, panic will ensue. A dispute like this entails some uncomfortable conversations between you and your sibling, guided by a professional exit planning professional, to arrive at an agreement. The business may still be damaged but hopefully not destroyed, and everyone will walk away with minor injuries. Your family might even ultimately grow closer from the experience.

The Safe Landing

If you’ve moved away from suing, you’re in the right headspace to now envision a scenario where both the business and your family carry on with little more than surviving a rough patch, or “water under the bridge,” to look back on.

Either or both of you can exit. One of you can buy out the other. You can professionalize the business, bring in outside leaders, establish clear processes, and maybe even scale so it feels less like a family heirloom and more like a high-functioning company. There are many ways to steer toward a safe landing.


Meditation & Mediation

Things may be extremely complicated right now. Start by keeping it simple. If you and your sibling can both stay cool and commit to a series of sit-down discussions around exit planning, the chances are high that you will be able to resolve your differences in the name of family. There will be conflict. There will be compromise. But the end result will be worth the hard work.