Like many Canadians, I read with great sadness about one of Canada’s most successful entrepreneurs Frank Stronach suing his daughter Belinda, two of his grandchildren and a former business associate over control of his business assets. According to his Statement of Claim, Mr. Stronach came to Canada in 1954 at the age of 21 as a struggling tool and die maker, founded his own shop in 1957, merged it with a public company in 1969 and ultimately parlayed his business into a world leader in the automotive industry.
He and his wife had two children, Belinda and son Andrew, who both became involved in the business which over time expanded into horse racing and became the largest owner and operator of thoroughbred racetracks in North America.
Frank (who is now 86) and his wife are alleging that Belinda (who is 52) and the former business associate have purported to unlawfully take control of the business in a way that favours their personal interests over the interests of the family. At the time of this writing, Belinda’s side of the story has not been told publicly.
There are however a few things that can be said about situations like this that will hopefully be useful for families in business or otherwise sharing or potentially sharing significant assets together:
- If you are a first-generation creator of wealth who would like to see the business eventually run by the next generation, start planning for that in a meaningful way by the time you are 60 years old or so.
- If by the time you are in your 70’s there is not an identified successor to run the business that you are fully comfortable with, then you should be going down another path and be fully open and transparent about that with any of your family members who might believe that they are next in line after you.
- If by the time you are in your 80’s there remains a disconnect between you and your children as to who is to be in control and by when, it is urgent for you to get matters resolved as soon as possible in an open and transparent manner with your family and other key stakeholders.
- Work with a family business consultant or other qualified advisor who does not prefer your interests over those of the business or the family as a whole.
Having said this, I make no comment as to what should have been done in the Stronach family as I have no actual knowledge of the situation. I can only wish them the very best in resolving things as effectively and expeditiously as possible.
Authored by: Ronald Prehogan – President, Equitas Consultants