In Focus
What can we learn about family business conflicts from Baker Mayfield?
People tend to go into business with friends and family members. Often, wealthy family members invest their money rather than their time in these ventures. Or, they entrust friends or family members to manage their financial and business affairs. The participants assume they can trust each other, and often do not document or monitor these transactions or enterprises.
Sometimes, this trust is misplaced, and investors or other participants learn that their investments or assets have been diverted or mismanaged. This can result in litigation and estrangement. Feuding family members may stop socializing and attending family events, and other family relationships can be affected.
Heisman Trophy winner and NFL quarterback Baker Mayfield found himself in this position. He invested in a business managed by his father and brother, and learned that they diverted millions of dollars to themselves. Mayfield filed suit, and the parties engaged in a mediation resulting in a settlement where Mayfield was to be compensated for his losses. When the settlement agreement was not honored, Mayfield brought suit to enforce it.
When Mayfield and his wife had children, they decided that repairing the damaged family relationships was more important than enforcing the agreement. Mayfield dismissed the lawsuit, forgave the debt, reconciled with his family and introduced his children to their grandparents. Of course, not everyone in Mayfield's position would be willing or able to make such a decision. His situation illustrates the importance of clarity, transparency, accountability and diligence when entering into business arrangements, especially where personal relationships are involved.
