If you ever had the chance to watch American Chopper you are familiar with the tension between Paul Teutul Sr. and Paul Teutul Jr. Unfortunately, that tension led to departure of Jr. from Orange County Chopper and of course lawsuits. (Peter Mahler provides an excellent recap of the litigation in his New York Business Business Divorce Blog.)
I hadn’t watched the show in a few years but my brother got me up to speed over the weekend. The short of it is Jr. owned 20% of OCC but Sr. was entitled to buyout Jr.’s position if he left. The litigation centered on whether they had actually agreed to a buyout provision and of course, what the value of the company was. It appears, though it is a little unclear, that the case has settled.
The good news for the Discovery Channel is the dispute has been good for ratings. This season has been styled "Senior versus Junior" and the show covers the ongoings at OCC and Jr.’s new shop, Paul Jr. Designs.
The bad news is business breakups that involves families have ramifications beyond business and impact the entire family. With any business that involves multiple owners, there needs to be a clearly defined and thought out exit strategy for a departing owner. There are very smart people and lawyers who have drafted what they thought was a comprehensive buy out provision of a departing owner or shareholder that either didn’t work or was declared unenforceable by a Court.
Careful attention to buyout provisions and other governance issues needs to be paid at the outset of the business. At that juncture, no one is really considering a nightmare business break up scenario, especially between a father and son, but they can and do happen.
Though Sr. and Jr. probably shouldn’t be in business together, hopefully they can resolve their differences. A little video insight into their relationship is below:
