A Family Lawsuit: Advance Damage Control

When litigation threatens, what can family members do to minimize its destructive power? Karen JacMar proposed a “manifesto” to limit the damage.

A lawsuit had not been filed but appeared inevitable. Disgruntled relatives had circulated an advance copy of a complaint against the top officers of JacMar Corporation, the family company. Named defendants were Jay JacMar, the founder’s son and CEO, and Jay’s sister, Karen, the company CFO. The draft complaint alleged that both had wrongfully abused their executive positions.

A mediator spoke to the assembled family and their counsel:

“Family lawsuits get out of hand in a hurry.

“Lawsuits rip and tear relationships built by generations of patient nurturing, then hand the shreds to future generations.

“If the JacMars are going to court, you need to contain the damage. You need to draw some boundaries that rampaging litigation can’t cross. So I have some homework for you. I want you to make some lists.

“First, list some family blessings about JacMar Corporation, who should be thanked for what and why.

“Second, list what you do and don’t want to happen during the lawsuit and why.

“Finally, list what should be done with your lists—who should see them and under what circumstances.

In response, Karen JacMar drafted this:

1.   Mom and Dad have left us with abundant opportunities and lifestyles we have not earned.

2.   We are the beneficiaries:
  • of Dad’s energy, ambition, hard work and generosity,
  • of Mom’s love, nurture and vigor,
  • our brother Jay’s vision, intellect and quiet leadership,
  • of our brother Frank’s warmth, wit and charm,
  • of the courage, strength and compassion of Frank’s widow, Frances, and of her sons’ continuing dedication to our Company, and
  • of our sister Karen’s versatility, loyalty and team play.
3.   JacMar Corporation is an important part of our family heritage. The Company has provided us with careers, prominence and personal wealth.

4.   Yet we differ on important issues involving Company management. We hope our differences will be settled through negotiation or mediation. If not, they will be resolved by court decision.

5.   Our differences are straining our relationships with each other and we anticipate further stress. We urgently desire to avoid unnecessary injury to our connectedness.

6.   Our remedies are limited to money damages. None of us subverts the importance of family to money demands. None of us will use litigation as an arena to expose rivalries, envies, injustices, hurts, slights or neglects.

7.   We wish to minimize publicity, sensationalism and erroneous reporting. None of us will communicate with the media about our differences or the litigation. We will instruct our lawyers to refrain from any public comment about our case. We will seek to have all records of this matter sealed from public inspection.

8.   A continuing healthy family relationship is our highest priority. We want to remain a strong family after this matter is concluded, regardless of its outcome.

9.   We are particularly concerned that our differences may adversely affect relationships between our children and grandchildren. We will do all we can to confine our disputes to our own generation.

10.   We urge our respective attorneys to be respectful and courteous to all family members at all stages of this matter. We ask them not to expose or exploit past disputes or differences between us that are not directly related to management of the Company. We ask all judges, magistrates and mediators to cooperate in our objective to protect our family relationship.

In an email transmitting the draft “manifesto” to the mediator Karen wrote:

“What do you think of sending the attached to the other side? Ask for their comments and suggestions?

“If they don’t buy in immediately, that’s OK. We can abide by it unilaterally can’t we?

“Maybe this will look better to them as the litigation progresses.

“Maybe it would interest the judge or jury.

“I guess the family could reconsider this even after final judgment.”

*Adapted from: Le Van, Families Money and Trouble (Xlibris 2003).]

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