Navigating a Business Partnership

Most people still forget, especially in the syndication business when we're partnering and that’s one thing in particular, we know real examples of this where someone gets sick. I mean, it's unfortunate, right? If their role is to be a property manager, so he’s still managing the properties and he’s terminally ill. Well, does he still get compensated and get paid? Does he still get the same equity? Does he still get the same monthly amount? You have to decide. You might be, “Hey, yeah. I'm okay with that.” At some point in time if it goes on for an extended period of time, you're probably going to be like, “You know what? I'm not sure this guy should still be getting any.” It's not to be mean. It is a business. You have to decide personally how you want to handle that, but you need to account for it. We have an example. I think this is tricky and we're not the only person to run this issue, but when you partner with somebody and they're also the management company, so they're serving as a third-party management company, or construction company, now you're a partner and now you want to get rid of them. Well, that's a pretty awkward situation. We've been through this situation with a partner. 

He was the third-party management company. Fortunately, we had a board of directors set up with a total of five of us. He was one of the five and we actually voted him out. This particular partnership, we've done a lot of great partnerships. It's pretty good a partnership with nightmare. That's an understatement. He stole money. We removed him. He had things he never recorded in the books and people are like, “Well, how can that happen?” Well, you know what happens on a regular basis. Don't be naive to think, “Oh, I'm Mr. high-and-mighty, so it can never happen to me.” When you get in that situation, then watch out, because that's when it can happen to you. We took all the right steps upfront, but he was a con guy and he didn't record things. He's liable. Unfortunately, we're in litigation, he actually passed away eight months ago, makes it even more difficult. That particular deal is in trouble, because of this. If you're going to be in business long enough, unfortunately, something probably will happen you didn't expect, but you need to just move on and do everything that you possibly can to make it the best you can, but reality is you might not have the outcome that you wanted.

Listen full episode here: https://lifebridgecapital.com/2019/09/ws320-navigating-a-business-partnership-with-your-beloved-with-mark-and-tamiel-kenney/