Partnerships. Like marriage - minus the sex.
The strengths of a good business partnership outweigh the challenges, but the weight of differences that arise can fast drag everyone down. I've had some great, some passable, and a couple of deadly toxic disasters – most recently with a couple who I invited into a new venture wholly based on my own successful experiences.
From day one I found their bickering and arguments faintly amusing, sitting cross-armed in a Surry Hills café at our regular meetings and steering them back to the agenda. The male was somewhat passive while the female was ferociously opinionated and single minded. Their demeanour was a flag I'll read early in future – our values, ethics and style were not aligned.
Through the creation of that partnership, which lasted eight years before collapsing in vicious legal 'lawfare', I missed a second flag that eventually overcame me. The lady was married to a lawyer who structured the partnership agreement. Not just any lawyer, a scrappy, attack dog of a guy who was semi-retired. He had all the time in the world to 'assist' her with her business.
These flags should have been obvious but eight years earlier I was more resilient and certain of my optimism. I believed then that I could navigate and negotiate any difficulties, applying the art of concession and the voice of reason. How wrong that was, and how different I now am, remoulded by the most passively violent dispute I've ever endured.
At the four year mark half way through we had out customary post tour lunch at Catalina, where she raised a new agenda. Lawyer had told her the business was growing and it needed to be run more formally. We would hence meet monthly, which was proscribed in the shareholder agreement. At that time she failed to recognise my counter points: the meetings were un-necessary, and thus far they – not me – had rescheduled many meetings as they were so busy with their magazine deadlines.
This was another mistake of my judgement. These people had a monthly trade magazine the same as I did. We faced the same challenges and surely would together be a great forum for collusion and strategies. But that did not happen, they are insular and uninterested in anything outside their orbit. They shrugged off discussions about media and more alarmingly grew hostile towards any mention of ENTECH. This was insane, since ENTECH was the very model this roadshow was based upon. The lessons learned in one assisted the other.
Irrational and annoying events multiplied; I would be asked the same questions year in, often about something they had on file from previous. Mistakes were made with simple things like the name of their exhibitor. They would contract a sale, I would raise the invoices and collect the payments and deal with the client for logistics. They would then refer to the client in another name or acronym. There was low discipline.
As the shows grew larger the team did two. My original team of three changed over the first four years and then Kate joined us to oversee registration and catering. We added a touring production manager. Female partner found problems with the catering each and every year, berating Kate -- who then proved her wrong using paperwork from last year.
Kate was told, 'you don't make decisions here, you are no body'.
Covid stopped the business for two years, during which the tensions went away although the transactions continued as we refunded 2020 and tried to rebook 2021. Then we refunded 2021, and put 2022 on sale.
At start of 2022 our first business meeting for two years was preceded by a draft agenda which attempted to recast the roles we had traditionally contributed. They did the sales and the marketing, I did the logistics. A remarkable line item in the meeting agenda revolved around the production manager.
"As you turned your ENTECH focus to America, you brought in the production manager to cover for you in the future, so you should pay for him", she said.
At the meeting that was quickly extinguished because the production manager commenced earlier than the USA experiment, and the role was plainly necessary due to the growth of the business. Then the clanger: "We have shut down our magazine now, so we have more time so I can do Kate's job", she loftily informed me. "We can save money".
Struggling to breathe through seething anger, I turned that one around stone cold dead. "Two things lady. One, you don't know what Kate does and you sure can't do any of it; and two, the company doesn't pay her, she is part of my partnership contribution". I was almost over the edge, as they backed down.
It was the portent of trouble incoming, because the next Zoom meeting she went in again with the same trope. I lost control and shouted into the screen for minutes on end, as she upped and walked out. I then addressed her partner, and advised they would need to buy me out as the partnership was over.
We did the May tour during which I attempted to educate them on the logistics thinking that an orderly handover would happen with them buying me out. They went through the motions for two shows, then stopped bothering for the final three. I suggested a brief debrief the day they didn't turn up for load in, to happen afterwards. "We don't need it", they replied.
Tour over we packed it all up, split the money – a cool quarter million for them and same for me, and then I tried to get the sale mechanism under way. "We require the accounts be finalised for June 30 first. Then we will have our accountant negotiate the sale", they informed me.
This was not how things get done, but I agreed. Their accountant took over from our accountant, and went into slow mode. June 30 passed, July was rolling along, and suddenly the agenda went to a Director Meeting at which the lawyer was to be the proxy for the male partner. I was to face off against him and his spouse, and the agenda kept getting more and more sinister.
They made an offer that was so conditional I rejected it outright. I counter offered almost $300,000 more to get them out. They produced a draft deed of sale that said if they didn't buy me out, they could walk away and open up in competition. They threatened to take the dispute to the Supreme Court, and seek costs from me. "People we trust say we should pay you nothing", they said.
At that stage I appointed an uptown law firm to protect my interests. I told them I wanted the firm put in the hands of a legitimate liquidator who would then sell the firm to one of us on a best offer basis.
Eventually that is exactly what happened. Our offer was less than their offer, because we identified the risk they flagged: that they would open anew and compete against us if we won the business.
After legal and liquidator costs we probably eventually will get very little or nothing at all.
The washup of this bitter tale is that they lost their magazine in Covid. I didn't – Jason Allen purchased it prior and managed to navigate it through. After a week of remorse and internal recriminations, I resolved that I was free of the constant stress of dealing with these humourless dour and greedy vultures.
They now have a new company granted rights to the name by the liquidator. They have the customer base they always had. Those exhibitors are all buying tickets on the Titanic because they will sleep walk into an operational mess with no infrastructure and no operational experience.
Unlike any other tradeshow, my roadshow model is a split second machine with a lot of moving parts that comes together in a few hours. They have no idea.
And I'm free!
A shareholder and partnership agreement should have clear and defined pathways if there is a dispute. This one just suggested 'good endeavours' and didn't have a mediation framework. I reckon the lawyer was always looking for the scenario that played out, and probably pulled the strings that brought the company down.
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