Law360 recently asked Matt Fletcher for his insights about a nationally reported disagreement involving the family members of Jeanie Buss, who owns a minority stake in the Los Angeles Lakers, over a decision to sell the Buss family’s remaining interest in the Lakers. Matt has handled many partnership disputes throughout his career, including recent trial victories in family-business disputes. In an article published on August 20, Matt answered numerous questions regarding the Buss family dispute and broader questions about partnership litigation. While the full article and interview with Matt can be read on Law360 with a subscription, some of Matt’s commentary is included below.

When Matt was asked – from a buyer’s perspective – what concerns may surface when one faction of the sellers claims that a transaction is authorized while another faction claims it isn’t, he commented:

Most buyers won’t transact if there is a dispute over authorization, but at a minimum you will see fundamental representations and warranties protecting the buyer if the sales transaction is voided.

Buyers of family businesses are adept at exploiting disputes among family members. Most investment bankers would advise family-run businesses to consider bringing in professional management and resolving any disagreements before taking a company to market for sale, as these issues can often result in lower purchase prices for family businesses than businesses run by professional management, with no family ties leading to disputes.

In discussing broader lessons for family-owned businesses to learn from this case when structuring ownership and planning for an eventual sale, Matt said:

The most fundamental lesson is having good succession planning and strong decision-making authority spelled out in the governing documents. It is also important to consult with a lawyer that excels in litigation planning as early as possible, with a lot of experience on how these cases are won and lost. If a dispute is unavoidable, the written record about the dispute will give an owner the best chance of winning a lawsuit.

Matt also commented on potential outcomes in this and similar cases, saying:

This case is unique because there is a prior settlement and court order that I understand impacts the outcome. That court order could be pivotal if it provides Jeanie Buss with decision-making authority over any future sale, despite whatever language is in the trust documents or governing documents for any of the parties’ entities.

Like it or not, sympathies play a role in every trial. Jeanie Buss wants to continue her family’s leadership of the Lakers. The other siblings want to cash out. Greed is a lot less attractive trial theme than honoring your father’s legacy. This is certainly an advantage, unless the judge or jury are Celtics fans.

The complete article with all of Matt’s commentary appears on the Law360 website here.