There can be many reasons why changing the ownership structure of the business is necessary. Business partners can have conflicting perspectives or personal events can motivate minority exits. Business owners in divorce face unique and difficult challenges.

Even when a buyout of a minority investor is in the best interest of the business and its partners, the necessary liquidity might not be available. Apsara Partners provides financing to facilitate quicker partner exits and business divorces, while maintaining continuity in operations and majority ownership.

Apsara Partners believes that the buyout of a minority partner should not impede the operations of the business. A prolonged buyout structure can still lead to additional conflict and shift funds away from attractive investments for the business. If the buyout is related to a martial divorce, the potential for conflict is even higher.

Many banks are unwilling to finance transactions like this. This could be related to the perceived riskiness of the transaction or to the unfamiliar structure. Plus, a bank loan, if available, could place an undue burden on operations with restrictive covenants and high monthly payments of principal and interest.

A new private equity investment could avoid some of these issues. But, finding an appropriate private equity sponsor is a long and difficult task. Additionally, the majority owner will almost always lose control of the business. If the sale is made more hasty, the more a majority owner gives away in value and control.

Apsara Partners invests across the capital structure to meet the needs of its private operating partners. We allow majority owners or ownership groups to retain control and limit interruptions to business operations. With financing from Apsara Partners, a business can repurchase the interest of a minority partner quickly and fairly.

Apsara Partner’s flexible financing meets the specific needs of its business partners. Going forward, the business can operate with a capital structure that does not hinder cash flow or growth.

Please contact us to learn more. If you are already working with an attorney and/or a financial advisor, find more information here.

A: We recommend that you speak with a legal professional more on these matters. However, in many cases, a private business is treated as one of a variety of assets in marital divorce. How the assets are split is a negotiated process between the parties.

Yet, unlike more liquid assets (e.g. cash, savings accounts, retirement assets), business interests are difficult to divide. Additionally, private companies are tough to value. With the assistance of legal counsel and other experts, Apsara Partners provides funding to help businesses unlock value for all parties involved.

A: We recommend that you speak with a legal professional more on these matters. However, in many cases, a private business is treated as one of a variety of assets in marital divorce. How the assets are split is a negotiated process between the parties.

Often in a marital divorce, both parties will have claims to private businesses owned during the marriage. However, a partner that wants to be the sole owner post-divorce will often have to compensate the other party. Yet, this can be a challenge if there are few other sizable assets and/or if there are not other sources of liquidity.

We believe that a full buyout of a minority partner (which could be a former spouse) is the best option for all parties. The owner operator can go forward with a business in his/her full control and the exiting party receives an immediate payment to start an independent life. But, frequently there is a lack of liquidity.

Apsara Partners provides financing for ownership buyouts of minority partners, especially in marital divorce. We believe in the strength and determination of owner-operators. Our goal is to assist our business partners in maintaining ownership control and operational continuity.

A: Frequently, the owners of a business or partnership can negotiate a buyout provision. Yet, in my situations, the payments will stretch over many years and might be contingent on the future results of the business. This type of deal is often necessary because the majority owner and/or the business lacks the liquidity for an immediate cash offer to the minority investor.

If an immediate buyout is desired, typical options include obtaining bank financing or finding a private equity sponsor. Yet, these options have limitations and drawbacks compared to the flexible and fast process of working with Apsara Partners.

A: A marital divorce does not just affect the former spouses. In many circumstances, a divorce causes financial strain and a lack of liquidity for both parties. Unfortunately, there can be ramifications for associated businesses and limited liability companies (LLCs). A negotiated transaction could require immediate funds or ongoing cash flows out of the business or LLC. In other circumstances, both spouses remain involved in the business and might have competing opinions. Sometimes, partnerships and LLCs require a buy-out; this is often the case for professional partnerships that do not allow non-qualified owners (e.g. law firms).

In all of these situations, we believe that outside capital from Apsara Partners can help. We enable fast and fair business divorces and buy-outs that maintain business continuity and improve financial health. We believe that working with us can help to avoid additional conflicts between business partners and ensure fair outcomes for all parties.