The Moment of Truth for Successful Family Businesses: Sell Out or Keep the Business in the Family

The Moment of Truth for Successful Family Businesses:Northeastern University
Sell Out or Keep the Business in the Family

Family Business Quarterly

For successful family businesses, there is invariably a time when an outside company comes along with an attractive offer to acquire the business. At that point, the owners face some of the most excruciating decisions anyone can confront.

Two executives who dealt with such situations–Ernest Henderson III, formerly of the Sheraton Corp., and Alexander M. Levine, formerly of Webster Spring–re-lived their experiences at a recent Executive Breakfast of Northeastern University’s Center for Family Business.

Henderson recounted how he finally decided to accept an offer to sell the family-owned hotel chain he headed to ITT. Ultimately, he concluded that he should accept the attractive buy-out offer in the interests of family owners who weren’t active in the business. “Holding together the company would have meant freezing the inheritances of all these people. Did I have the right to freeze the inheritances of these other people? I finally decided I did not have that right.”

For Levine, who operated a successful manufacturing business together with his brother-in-law, the offer by a competitor to buy the business late in the 1980s represented a way out of an ongoing internal buy-out struggle.

Succession Planning

Succession Planning

by Adriane B. Miller

Small, closely-held companies must confront this thorny issue.

John R. Beever doesn’t know how his business would function if he fell out of an airplane today–but he’s prodding his family and key managers to discuss it.

Mr. Beever, 59, runs family-owned John Dittmar & Sons, Inc., a Baltimore custom woodwork manufacturer that his great-grandfather started in 1876.

But discussing the future raises difficult questions. Mr. Beever’s two sons, Geoffrey and John C. are in their 30s and vice presidents of the firm. Both are enthusiastic about the business, both are bright. Both want to succeed their father. More…