Comprehensive Counsel For Businesses Facing Judicial Dissolution

While many companies endure for decades, not all business relationships last, leading some to face the complex process of judicial dissolution. A court’s involvement in dissolving a business can pose numerous challenges. Unlike voluntary dissolution, these “business divorce” cases may be fraught with animosity, and the stakes are high. Every party with a stake in the business should have their own legal counsel to protect their interests.

At Lannon Land Litigation Local Law, PLLC in Orlando, attorney Andrew “Andy” Lannon handles high-conflict judicial dissolution cases with insight gained through 20-plus years of experience. His skill and proven successes in business litigation translate into effective strategies for clients facing conflicts over whether to close a business. A board-certified specialist in business litigation and local government law, Andy provides knowledgeable legal representation for business clients throughout central Florida.

Grounds For Judicial Dissolution

Judicial dissolution – that is, court involvement to dissolve a business – may be necessary under several circumstances. The procedure and legal grounds are laid out in the Florida Statutes, tailored to different business entities such as limited liability corporations (LLCs), corporations and partnerships. The judicial dissolution process involves establishing grounds for terminating the business, unwinding business affairs, settling liabilities and distributing assets among the owners.

Common grounds for involuntary dissolution include:

• Deadlock among members or directors that halts business operations
• Illegal, oppressive or fraudulent actions by directors or members
• Misappropriation of business or corporate assets
• Inability to carry on the business in conformity with the operating agreement

Cases involving fraud or unlawful conduct may also warrant the involvement of state officials through special proceedings.

Factors That Commonly Lead To Judicial Dissolution

Poorly established and poorly run businesses are more likely to face dissolution disputes or involuntary dissolution. Common issues with these businesses include:

• Lack of clear governance structures: Businesses that lack well-defined governance frameworks often struggle with decision-making and accountability, leading to conflicts and litigation.
• Failure to uphold corporate formalities: Sloppy business formalities – for example, failing to keep corporate minutes, skipping mandatory annual meetings or failing to keep business assets separate from personal – can make the business vulnerable to judicial dissolution.
• Noncompliance with legal requirements: Failure to adhere to legal standards, including those related to financial reporting and regulatory compliance, can trigger legal actions leading to dissolution.
• Ineffective management: Inadequate management can result from a lack of competence, foresight or integrity among the leadership team, jeopardizing the business’s viability.
• Breach of fiduciary duty: The fiduciary duties of directors include prudently managing the company in the best interests of its owners, without self-dealing or conflicts of interests. Breaching these duties can lead to financial losses, legal challenges and potential dissolution of the business.
• Issues with successor to directors: Uncertainty or disputes related to the succession of directors can destabilize the governance of the company. A clear succession plan is essential for maintaining continuity and confidence among business stakeholders.

These factors highlight the importance of sound business practices and governance.

Choose The Right Legal Partner

Given the complexity of judicial dissolution proceedings, it’s critical to have a lawyer with proven skill and experience in this niche area. You can rely on attorney Andy Lannon as a valuable legal ally to safeguard your interests during this transition. Contact Lannon Land Litigation Local Law, PLLC today at 407-775-2567 to discuss your dissolution concerns.