Ian Hodgkinson of Mace & Jones partnership unit said the Gallagher brothers high profile bust up had already cost the band £4.75million in lost appearance fees and merchandise sales. But the split also threw up questions of ownership of the Oasis brand and how its assets and revenues can be divided now the brothers are estranged.
“No doubt the managers of Oasis will have a tight legal framework for the band’s business affairs given their famously combustible relationship,” he said. “But it does act as a reminder that many businesses also end in disagreement and looking back in anger when the business partners, like Noel and Liam, can no longer work together. This break down in communication and relations may not be as spectacular as the Gallaghers but it is often not foreseen or considered when the business starts. This is particularly the case with the huge number of people who go into business with a member of their family. Understandably families tend to trust each other but as Oasis has so graphically shown the pressures of working together can sour even the closest family relationship. In Oasis’ case the brothers couldn’t put aside their differences despite their commercial success and this is frequently the case when partnerships split.”
Hodgkinson said to prevent a potentially costly, drawn out and complicated partnership break up it is vital to set up a legally drafted partnership agreement.
“The agreement is the partnership’s roadmap – it gives it a constitution,” he said. “This ensures that if the business partners fall out there is a clear structure for splitting the assets of the business. This includes intellectual property, the business name, property and any future earnings. Without a partnership agreement winding up the firm can become an acrimonious ‘free for all’. For example, individual partners may attempt to hijack customer lists and contacts and even the name of the partnership. This can lead to lawyers becoming involved at a very early stage and court injunctions being sought to bring order to the process.”
Mr Hodgkinson said the constitution will further provide for the growth and development of the business including the admission of new partners and retirements including all the attendant financial consequences. Issues as to ownership of property whether freehold or leasehold, will also be included. Broadly a properly drawn partnership agreement will try to address much of what is found, in the case of a limited company, within articles of association and shareholder agreements.
For further information contact ian.hodgkinson@maceandjones.co.uk
