Dunn Lambert, LLC NJ Business Law & Commercial Litigation Attorneys | Dunn Lambert, LLC 2026-08-01T14:03:26Z https://www.njbizlawyer.com/feed/atom/ WordPress /wp-content/uploads/sites/1602439/2021/03/cropped-Favicon-32x32.png On Behalf of Dunn Lambert, LLC <![CDATA[When mediation or arbitration makes sense for a “business divorce”]]> https://www.njbizlawyer.com/?p=50869 2026-08-01T14:03:26Z 2026-08-01T14:03:26Z Mediation helps to support productive discussions The mediation process can allow disputing owners to work with a neutral facilitator who guides structured conversations. This encourages open dialogue and helps participants identify practical solutions. Many prefer mediation because it preserves privacy and reduces conflict. It also allows parties to maintain control over the final outcome rather than relying on a judicial ruling.

The role of arbitration in business divorce

Arbitration provides a more formal process that resembles a streamlined hearing. A neutral decision maker reviews evidence and issues a binding decision. This option is often used when owners need a concrete resolution quickly or when an operating agreement requires arbitration. Many businesses choose arbitration because it limits public exposure and offers a relatively predictable timeline.

Factors to consider before choosing a process

Selecting the right dispute resolution method for a particular situation requires careful evaluation. Owners should consider the complexity of the issues under scrutiny, the level of cooperation between participants and the need for confidentiality. Each factor can influence whether mediation or arbitration will be likely to inspire a workable outcome. Seeking experienced legal guidance can help you evaluate risks, interpret contractual requirements and select the dispute resolution method that is most likely to protect your business and your rights effectively.]]> On Behalf of Dunn Lambert, LLC <![CDATA[Warning signs of an impending shareholder dispute in New Jersey]]> https://www.njbizlawyer.com/?p=50868 2026-07-27T13:23:16Z 2026-07-27T13:23:16Z Why prompt detection matters In a closely held company, shareholders often have multiple roles. This overlap can make conflicts especially disruptive. A minor strategy dispute can quickly turn into a fight over pay, access to information and control of the business. New Jersey law also recognizes that minority shareholders can be harmed through oppression in these corporations. This can lead to major legal remedies, such as buyouts and other court-ordered relief. Taking business partner conflict indicators seriously is crucial early on as finding solutions is easier before positions harden.

Communication breakdown

This is often one of the first warning signs of conflict between shareholders. Meetings stop or happen without some owners. Requests for key documents may be ignored or delayed. People may also start copying lawyers, accountants or trusted employees on routine emails. When shareholders stop sharing information, disagreements can lead to mistrust. To avoid this, business owners can restore formal governance and set clear rules for sharing information. A neutral third party can also help keep discussions on track before anyone turns to legal action.

Disagreements over business direction

Disputes can happen when shareholders disagree on the company’s direction, especially if they have different views on risk. Problems can also escalate if one shareholder changes their role, authority or day-to-day control without formal approval from the others. Often, these disputes are really about who has control and who gets to make decisions. If a shareholder feels left out of key choices, the conflict can quickly turn into a deadlock that puts the business at risk. To lower the risk of long disputes, set clear decision-making rights from the start. Shareholder agreements should state who can make major decisions and which actions need full approval. Tie-break rules, independent directors and regular reviews can also help prevent conflicts from growing.

Compensation and money disputes

In closely held companies, compensation is often the main way shareholders get value from the business, especially when dividends are rare or profits stay in the company. As a result, pay decisions are rarely purely financial and are often seen as issues of fairness, trust and control. Conflicts can occur when one shareholder believes another is receiving disproportionate benefits or using company funds for personal advantage. This problem can quickly escalate into allegations of self-dealing, oppression or breach of fiduciary duty. Setting clear decision-making rights from the start can lower the risk of long disputes. Additionally. shareholder agreements should state who can make major decisions and which actions need full approval.  Additionally, the content on financial reports should be easy to understand so all shareholders can see how money is spent.

Operational conflicts

Another possible warning sign is when the business starts running like two separate companies. It can look like owners undermining each other in front of employees or customers or one shareholder builds a loyal group of employees and freezes out the other. Operational conflict is often the point where the dispute becomes expensive. Employee turnover rises and the company’s value can drop quickly, making any future buyout or exit more difficult. To address this, owners can clarify roles in writing, implement internal controls and adopt a dispute escalation clause to keep things amicable.

Preventing partnership disputes

When early signs of conflict appear, the goal is to clear up confusion, rebuild openness and set a practical path forward that protects the business. Many partnership disputes often worsen because assumptions go unchallenged or the parties continue operating without clear rules. When a dispute comes up, holding a formal shareholders’ meeting quickly to set clear guidelines can prevent the conflict from dragging on. If it cannot be settled right away, agreeing on temporary rules can keep the business running smoothly. Shareholders may also add a buy-sell clause to the agreement to give a clear way for exits if the relationship is beyond repair. It is also important to keep ownership matters separate from job-related matters to protect the business. Acting fast and setting clear steps can often solve the problem without harming the company or leading to avoidable court action.

Why early intervention is vital

Fixing problems early can often mean the difference between the business surviving and shutting down. When issues are spotted and handled quickly, companies can better manage costs, keep customer trust and prevent bigger financial or operational harm. Taking action early gives owners more choices. They may be able to restructure debt, improve cash flow or get outside help. In many cases, acting sooner helps a company stay open and prevents a full corporate relationship breakdown.

Real-life New Jersey cases

While every case is unique, there are a few notable New Jersey cases where addressing shareholder disputes early could have prevented litigation or dissolution, For example, Brenner v. Berkowitz (1993) highlights that shareholder oppression claims often arise when reasonable expectations are unmet. If those expectations are not written down, disputes can become costly and heavily focused on the facts. A well-written shareholders’ agreement can define those rules and include clear solutions, like buy-sell terms and valuation methods. This can lower the risk of lawsuits and help guide any future proceedings. The case of Bonavita v. Corbo (1996) shows the problems that can happen when a closely held business lacks cash access and clear ways for an owner to exit. After a 50% owner died, the remaining owner did not pay dividends to the widow. He paid himself a large salary and reinvested the profits instead. In the end, the court ordered the company to buy out her shares. Drafting a clear buy-sell agreement early, with triggers like death or disability, could have prevented the conflict and protected her ownership interest.

Planning ahead to prevent conflict

Creating a plan for business partnership dispute prevention is not about proving who is right. It is about building systems that stop disagreements from becoming conflicts that could end the business. A lawyer can assist in drafting strong shareholder agreements that help break deadlocks while protecting the company’s value.]]> On Behalf of Dunn Lambert, LLC <![CDATA[When can you sue for trade secret misappropriation?]]> https://www.njbizlawyer.com/?p=50867 2026-07-23T15:33:43Z 2026-07-23T15:33:43Z Employees often leave a company with valuable knowledge and experience. While they are generally free to use their skills in a new job, they cannot take or misuse confidential business information that qualifies as a trade secret. When an employee improperly uses protected information after leaving a business, it may lead to trade secret litigation. Understanding when trade secret misappropriation occurs can help business owners protect valuable assets and respond appropriately.

What are the grounds for a claim?

A business may have grounds to file a claim when a former employee improperly acquires, uses, or discloses confidential information that qualifies as a trade secret. This often arises in employment litigation involving former employees who join a competitor or start a competing business. Not every piece of confidential information is a trade secret. To qualify for legal protection, the information generally must:
  • Have independent economic value because it is not publicly known
  • Be kept confidential through reasonable security measures
  • Provide a competitive advantage to the business
Examples may include customer lists, pricing strategies, manufacturing processes, proprietary software, marketing plans or technical designs. Trade secret misappropriation may occur when a former employee copies confidential files without permission, shares protected information with another company, or uses trade secrets to compete against a previous employer. In some cases, even information retained from memory may become an issue if it involves protected trade secrets rather than general knowledge or skills. Successful trade secret litigation may result in court orders preventing further use or disclosure of the information. A business may also seek financial compensation for losses caused by the alleged misappropriation. Depending on the circumstances, a new employer that knowingly benefits from the improper use of trade secrets may also face legal liability.   Acting quickly is often important because evidence can disappear and confidential information may continue to spread once it has been disclosed. Businesses should also document the steps they have taken to protect confidential information, as these efforts may be relevant if a dispute arises.   If you believe a former employee improperly used confidential business information, seeking legal guidance can help you evaluate whether trade secret misappropriation occurred and whether employment litigation or trade secret litigation may be appropriate under the circumstances.]]> On Behalf of Dunn Lambert, LLC <![CDATA[What you must know before entering franchising in New Jersey]]> https://www.njbizlawyer.com/?p=50866 2026-07-14T11:10:41Z 2026-07-14T11:10:41Z Why a franchise relationship is unique Starting an independent startup or partnership is significantly different from franchise relationships. A franchisor owns the brand and system, while a franchisee owns and operates the physical business asset. If you are planning to franchise a business, you pay for a system and give up significant independence. Investing your capital and labor to build the brand is part of the process, but you do not have a share in the brand’s intellectual property. This power imbalance aims to protect the franchisor, but the NJFPA sets rules to prevent an unjust relationship.

When franchisee rights protection applies

Gaining protection under the NJFPA may only apply if you meet these franchise legal requirements:
  • You conduct business in New Jersey.
  • The gross sales between you and the franchisor exceed $35,000 for 12 months.
  • You derive more than 20% of your gross sales from the franchise.
Satisfying these means you are safe from unfair practices of a franchisor. Under the NJFPA, a franchisor cannot cancel your contract without proper notice. They also cannot prevent you from joining a franchisee association. Additionally, franchisors cannot force you to sign a contract that waives your rights under state law.

What you should watch out for in agreements

Conducting a franchise agreement review in New Jersey before signing is crucial. This document heavily favors the brand owner, and signing without evaluation risks you of losing capital. Be wary of high-risk clauses that include:
  • Ambiguous Territory: Terms that allow a brand to open business near you
  • Undisclosed upgrades: Statements that do not define any operational changes that may occur mid-contract
  • Defined vendors: Provisions that give the franchisor full control over vendors to buy inventory, ingredients, packaging and software from
  • Vague marketing funds: Clauses that grant the franchisor the right to increase your contributions on advertising
  • Exit penalties: Conditions about fining you with costly penalties should you choose to close early.
Scrutinizing franchising agreements for red flags can be difficult due to legal jargon. Even if you may have experience in navigating contracts, a misunderstanding can result in a partnership that risks your livelihood.

Begin franchising with caution and legal guidance

Franchising can be lucrative, but you must be careful of what you sign. If a franchisor offers their terms, make sure to review it and negotiate your protections. You have the power to ask for larger protected territory to prevent internal competition or set expectations on operational upgrades. Additionally, define the steps for franchise dispute resolution when conflict arises. You can also ask a business attorney to review the agreement. They can break down the terms, explain them to you in simple language and offer insights into making the franchise relationship work for you.]]> On Behalf of Dunn Lambert, LLC <![CDATA[How is AI use increasing litigation risk?]]> https://www.njbizlawyer.com/?p=50864 2026-07-11T00:02:18Z 2026-07-11T00:02:18Z face legal action. Even if you have not embraced AI, many of those who work for you may have, whether you know it or not. Further, many of the other companies and members of the public you deal with are using it.

Errors resulting from its use

You have always been able to face legal action because of mistakes someone within your company makes, and that has not changed. The problem is that now, many people and companies are entrusting much of their work to AI. While AI can be useful, it can get things wrong. Actions are often taken based on what AI suggests without proper human oversight to catch its errors. However, if there is a problem, you cannot just blame AI. It is your company that will be held to account.

Emboldening people to act against you

AI has also increased the chances of people bringing a claim. In the past, if someone had a complaint, they might not have brought it because they felt they did not have any legal standing. They might have thought the cost of hiring someone to handle it for them would be too much. Yet now, by typing a few notes about the issue into AI, they can come up with what they believe is a legally sound plan of action. Before you know it, they have sent you a legal-sounding complaint or claim that they are confident will get the issue resolved in their favor. The information AI produces for them may be totally wrong, but you will still have to deal with it, and they may be convinced it is right due to the legalistic language and tone AI used. Seeking experienced legal counsel from a human can help you fight spurious claims. It can also help you handle disputes resulting from AI-made mistakes by your company.]]> On Behalf of Dunn Lambert, LLC <![CDATA[5 warning signs your business partnership might be in trouble]]> https://www.njbizlawyer.com/?p=50862 2026-07-07T13:48:12Z 2026-07-07T13:48:12Z 1. When money matters become unclear Every healthy partnership needs clear financial records. You should worry if your partner loses records or if you see expenses that no one can explain. For instance, you might notice that financial reports arrive late or you and your partner might disagree about how to split profits. These issues often point to deeper problems and you must address these financial gaps immediately through an honest discussion.

2. When decision-making breaks down

Disagreements happen occasionally in any business relationship. However, the partnership foundation begins to crack when one partner starts making major decisions alone without asking the other. For example, you might discover that your partner ignores voting procedures or signs important contracts without getting your approval. Because these actions show a lack of respect for your partnership agreement, they can quickly destroy your professional bond.

3. When the workload feels completely unfair

Anger builds quickly when one partner does most of the work while the other seems uninterested. Perhaps, you arrive early and stay late while your partner takes long lunches. In other cases, one partner might focus on side projects instead of the shared business. This imbalance creates tension that will only grow worse if you do not address it.

4. When trust starts to disappear

You must pay attention when your partner suddenly limits your access to important business information. Specifically, watch for when your partner:
  • Blocks your access to bank accounts you used to monitor.
  • Makes customer lists and contact information "off-limits" without explanation.
  • Changes key passwords without sharing the updates with you.
  • Creates secrecy around relationships with vendors and contract discussions.
  • Requires you to get special permission to use financial software.
These protective actions often mean your partner either fears something or plans to make moves without telling you. Under New Jersey law, freezing you out of corporate records and accounts like this is not just a red flag. This action can constitute illegal “minority shareholder oppression” or a breach of fiduciary duty.

5. When communication becomes a paper trail

The tone of your partnership changes dramatically when casual conversations stop. Instead of talking in person, every interaction occurs through email or text messages. You might notice that your partner writes accusations into formal messages. Your partner is likely planning each exchange to create a legal record rather than to solve a problem. This shift toward heavy documentation often happens right before legal action begins.

What to do when you see red flags

These warning signs do not guarantee that you will end up in court. Rather, they serve as signals for you to investigate your concerns and seek answers. In fact, many partners save their businesses when they address issues early with openness and good intentions. However, recognizing these patterns helps you protect your interests and make smart decisions about the future of your business. Before you confront your partner, quietly locate and review your original NJ Partnership Agreement or LLC Operating Agreement with a trusted counsel so you know exactly where you stand.]]> On Behalf of Dunn Lambert, LLC <![CDATA[Why should small business owners take disputes seriously?]]> https://www.njbizlawyer.com/?p=50861 2026-06-27T18:16:23Z 2026-06-27T18:16:23Z disruptions that a small business owner might experience. These happen for a variety of reasons, including missed payments, unclear contract terms, customer disagreements, vendor issues or employee complaints. At first, the issue may be manageable, but it can quickly become a financial, legal or operational issue if it’s not handled properly.

Why do disputes have a significant impact on small businesses?

Small business owners usually have limited time and cash flow. They may have a limited support staff. Disputes that wouldn’t place pressure on a larger company may lead to significant disruption for a small business. This can come in the form of lost productivity, damaged relationships and unexpected legal consequences.

How can small business owners reduce the likelihood of a catastrophic disruption?

Taking a dispute seriously doesn’t mean that the small business owner will automatically escalate every dispute. Instead, it means honestly reviewing the facts, preserving records and responding in a professional manner. Early attention may help to prevent missed deadlines, and it may prevent it from seeming like the small business owner doesn’t care about the dispute. Using clear contracts, consistent billing practices and writing workplace policies may help to reduce workplace conflicts and make it possible to resolve disputes quickly. When that’s not possible, it’s beneficial for the small business owner to have someone on their side who can assist with protecting the business’ best interests.]]> On Behalf of Dunn Lambert, LLC <![CDATA[Breach of fiduciary duty can lead to business litigation]]> https://www.njbizlawyer.com/?p=50860 2026-06-15T13:38:29Z 2026-06-15T13:38:29Z breach of fiduciary duty.

Conflicts with business partners

Say that there are two partners who own a business together. Each partner has a fiduciary duty to the company. When making key decisions, they have to put the company's best interests first and try to avoid causing financial harm. One partner may believe that the other has violated that fiduciary duty. Say that one business partner was in charge of financial transactions, while the other handled product design and day-to-day operations. If the partner with financial authority used it to benefit themselves, they may have breached their fiduciary duty to the business. They could cause financial harm to the company that causes its value to drop, which in turn harms their business partner. In the end, the partner who has suffered that harm may have to turn to litigation, which could potentially result in one business partner having to leave the company entirely. These can certainly be complex commercial litigation cases, which is when it is so helpful to work with an experienced attorney when scenarios like this arise.]]> On Behalf of Dunn Lambert, LLC <![CDATA[Business partnerships and financial conflicts]]> https://www.njbizlawyer.com/?p=50859 2026-06-01T16:43:36Z 2026-06-01T16:43:36Z One potential reason for conflict in a business partnership is that there are financial issues the partners have not resolved. This is why it can often be helpful to draft a partnership agreement addressing these issues upfront. Financial conflicts can grow complicated and emotional. They often lead to litigation when the business partners cannot find a resolution on their own. Below are a few examples of potential conflicts.

Issues with contributions

First and foremost, when partners start a new business, they need to be very clear about what they are each expected to contribute. Are they directly investing their own money in the business? How much time and effort are they going to have to contribute? Never make assumptions about these key details.

Splitting up earnings

The division of revenue or profits can also lead to conflict. One business partner may accuse the other of misappropriating company funds for their own use. There could also just be conflicts about how much each person expects to take as a wage or a salary.

Dividing ownership percentages

Finally, the contributions that business partners make to the business sometimes help define their ownership percentages. It is important to address how much of the business each person owns. If the partners decide to sell the business in the future, they need to know exactly what percentage of the proceeds to expect. Ownership percentages can also dramatically affect how partners make decisions about the future of the company. When conflicts over decision-making, ownership rights or financial contributions do lead to litigation, business partners must understand their legal options.]]> On Behalf of Dunn Lambert, LLC <![CDATA[What triggering events allow for the use of a buy-sell agreement?]]> https://www.njbizlawyer.com/?p=50857 2026-05-16T12:47:34Z 2026-05-16T12:47:34Z Most buy-sell agreements have similar standards While various aspects of buy-sell agreements need to reflect the unique business created, the triggering events that allow one partner to acquire the other’s interest in the company are often roughly the same. The most common triggering events include:
  • The death of a partner
  • The decision to retire
  • One partner becoming incapacitated
  • A voluntary exit from the company to pursue another business opportunity or job
  • An involuntary exit triggered by a breach of fiduciary duty
A partner hoping to purchase the company using a buy-sell agreement generally needs to follow the terms outlined in the contract. They also need documentation affirming that a triggering event has occurred. Working with a lawyer familiar with business buyouts or partnership breakups can help partners navigate a potentially contentious process as calmly and effectively as possible. A review of a buy-sell agreement can help people determine if qualifying events have occurred and if they are in a position to buy out a partner.]]>