Protecting a Business During Divorce

For a divorcing party with an interest in a business, ensuring that all business information, including any business partner’s information, is safeguarded is typically a paramount concern. The discovery process, the time during which the parties must openly disclose documents related to their assets and liabilities, can be especially challenging during a divorce when a business is involved.

To prevent the disclosure of any highly confidential information, a party is well-advised to be proactive at the outset of the case. A party with a business interest, understandably, wants to avoid having subpoenas for documents or depositions being served on the business and individual partners.

One option is for the parties to enter with the court an Agreed Protective Order. This is an agreement, prepared by the lawyers, which memorializes each spouse’s, as well as their counsel’s and staff’s, agreement to not produce or disclose any documents or information to a person or entity who is not a party to the case. Generally, the agreement also provides that confidential business information cannot be filed in the public court record or, if it is, it shall be filed under seal. Depending on the nature of the business, counsel can draft specific provisions that address the parties’ and business’ needs.

Since both parties have an interest in all business dealings acquired during the marriage, they can often agree (ideally, early in the case) to enter a Protective Order with the court. Where there is no agreement, one party may petition the court to enter the protective order. If the party can show that the protective order alone is insufficient to protect the business, a party may ask the court to “supervise” discovery, or set clear boundaries related to the production of documents and information.

Where a business is involved, it is critical that your family law attorney understands how to protect the assets and manage litigation. Such expertise can prevent major headaches and costs in and out of the courtroom.

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