I love watching Hallmark romance movies. (Yes, I am a guy.) My wife and former Associate, Maureen McKay, does not. They are too sicky sweet for her taste.
I watch these films because, after a lifetime of stress in the legal profession, I find that thrillers and suspenseful stories trigger my self-diagnosed and made-up condition, Post Professional Stress Syndrome. Formulaic romance movies are predictable, safe, and non-triggering. I can sleep at night after watching them.
For those who say that these Hallmark romance movies are not realistic, I would counter that that the Hollywood blockbuster films that feature lawyers, judges, doctors, politicians, and nuclear scientists who are all gorgeous and in their early twenties, are equally unrealistic.
I was watching one of these movies the other day, and the plot (if you can call it that) involved a father, who had built up a national chain of retail stores, announcing to his son that he had decided to retire and was turning the business over to his son. A few minutes later he left the premises holding a file box full of his personal items, declaring, “it’s all yours now, son.”
Son took over and immediately changed the name of the chain to include a trademark owned by his former competitor, a small neighbouring shop run by the young lady with whom he had fallen in love a few days earlier and then promptly put out of business. He hired her and her best friend to help run his newly inherited empire, and they all lived happily ever after. It was all very sweet (although it is possible that they did less wholesome things after the credits ran.)
There was absolutely no mention of valuations, estate freezes, Wills, shareholders agreements, taxes, prenuptial agreements, employment contracts, or a host of other things that used to keep Maureen and I awake nights. I don’t even know if the young lady assigned her trademark or licensed it to her starstruck lover’s company, and whether she received any compensation for doing so.
As for Dad, I have no idea whether he transferred the shares to his son outright and took a tax hit for doing so, and whether after the transaction he had enough money to enjoy his retirement. Will he be reliant on the company surviving to fund his retirement? Did he get released from any guarantees given to the Bank? Who knows!
And if, after the credits roll, the young lady finds out that she does not like the young man so much after all, will she be financially dependent on him, having lost her business and gone to work for his company? Will she sue for trademark infringement? More unknowns.
There is a point to at least some of what I write about. The point of this otherwise fluffy piece is that life is not a Hallmark romance. Business succession is complicated. Business owners would be well advised to hire professionals who specialize in this area of practice. And lawyers should not dabble in this area unless they know what they are doing.
This article was originally published by Law360 Canada, part of LexisNexis Canada Inc.