Case Studies

Reshaped board of family owned and operated manufacturing business to address dissension among CEO and board members.

Company Situation

Father started a manufacturing company and grew it into a lucrative business. When the father retired from the Company and left its board, one of his sons became the CEO and the Board then consisted of the CEO and his four siblings: three brothers and a sister. Despite the success of the Company, Board meetings became increasingly rancorous and unproductive and the CEO repeatedly clashed with the Board over the direction of the Company. Finally, several of the siblings retained attorneys to advocate their respective positions about mismanagement and CEO’s alleged breach of fiduciary duty.

Varuna Strategies' Action

  • Convinced Board members that litigation would be counterproductive for Company and would not address the fundamental problem: a failure to make well-considered, timely business decisions
  • Helped create a more professional working environment
  • Re-shaped Board to include independent (i.e., non-family) members and instituted governance best practices

Results: 18 Months Later

  • Board is functioning productively
  • Board provides support and expertise to CEO
  • Business grew 15% in the following 18 months

Result

With a unified CEO and board following governance best practices, business grew 15% in 18 months.

Built an advisory board to drive strategic growth and address senior management issues of a family-owned marketing and distribution company with a non-familial CEO.

Company Situation

Three siblings own and work for Company founded by their father. Decision-making was haphazard due to differences among the three owners and lack of formal governance process. CEO, not a family member, was challenged in getting clear direction from owners and important business decisions made.

Varuna Strategies' Action

  • Discussed and identified concerns about how decisions had been made in the past.
  • Helped create a series of shared goals to help support the CEO and processes by which the owners would participate in decision making.
  • Worked with owners and CEO to create an Advisory Board by determining the needs of the Company, along with the skills and expertise of Board members that would best serve the Company to address those needs.
  • Identified and recruited Advisory Board members and now serve as chair of the Advisory Board.

Results: Ongoing

Advisory Board has met over the past two years and is functioning extremely well. Among the items addressed:

  • The need to strengthen the senior management team; three new senior managers have been hired.
  • The direction of the Company’s newly revised long-range business plan.
  • How to best track the increase in the enterprise value of the Company, with an eye on future investors or sale of the Company.
  • The development of a process for evaluating and compensating the CEO based on the accomplishment of agreed-to annual goals.
  • Concerns and questions of the owners regarding senior management, which are discussed in executive session of the Advisory Board.

Result

Elevated company’s enterprise value, creating appeal to future investors or buyers.

Realigned differing views among partners in a start-up real estate company at risk of an acrimonious split.

Company Situation

Four long-time friends formed Company to buy, improve, hold and sell commercial real estate. Their first acquisition was a portfolio of four commercial real estate properties from a troubled real estate owner. However, the partners began to argue about the next acquisition and the operation of the Company. Soon, partners began to seek independent deals and one partner retained an attorney to take legal action to stop the acquisition of real estate by other partners.

Varuna Strategies' Action

  • Helped align vision of Company among partners
  • Amended operating agreement to align it with business vision of partners
  • Addressed operational issues that had become an unnecessary distraction

Results: 9 Months Later

  • Company makes major acquisition agreed upon by all partners

Result

Cleared the way for company to make a major acquisition by amending operating agreements to align with business vision of all partners.

Other Client Engagements & Legal Representations

  • Advised on strategy to address venture capital portfolio company’s national litigation issues.
  • Guided transportation company involved in contentious multi-state litigation; helped coordinate efforts of numerous law firms, bringing cases to speedy, successful conclusion.
  • Represented the world's largest producer of live entertainment in a lawsuit initiated by a concert producer who claimed rights to produce concerts for the Rolling Stones. Devised and executed a strategy to release the attachment of gate receipts held by the plaintiff, and ultimately settled the case favorably after trial in federal court.
  • Represented a minority shareholder in a multi-million dollar claim for breach of fiduciary duty, which resulted in the client receiving 40 times the price of the initial investment, instead of 4 times the price as offered by the company.
  • Represented a start-up company against a claim by a publicly traded company for protection of trade secrets, misappropriation of proprietary information, and copyright issues. The outcome resulted in the client retaining ownership rights to state-of-the-industry network software.
  • Represented a real estate developer in a landmark Massachusetts case in enforcing the agreement for purchase of a key parcel of land in major downtown Boston real estate development.