business divorce

After the Ink Dries: Post-Closing Buy-Sell Disputes That Drain Illinois Dealership Deals

April 26, 2026 | Peter S. Lubin and James V. DiTommaso

The deal closed on a Friday. The selling dealer went to Naples. The buyer took the keys on Monday, and by Wednesday was staring at a floor plan audit showing twenty units short, a used-car inventory valued two hundred thousand dollars below the closing schedule, and a working-capital adjustment the seller’s accountant had, in the buyer’s view, quietly gerrymandered. The buyer calls us. So does the seller, a week later, demanding the earn-out the buyer now refuses to pay.

This pattern repeats across Illinois dealership deals. Our earlier post on the five critical clauses every Illinois dealer needs in a buy-sell agreement addressed what the agreement itself must contain. The next battleground is the one that opens after the agreement is signed. Post-closing disputes between dealer principals are where deals go to die, and they fall into three familiar buckets: working-capital adjustments, indemnification claims, and earn-outs.

Working-capital adjustments are the first and most common flashpoint. Nearly every dealership asset purchase agreement includes a true-up mechanism tied to a target net working capital figure, measured as of closing and adjusted within 60 or 90 days. The seller’s preliminary closing statement anchors the seller’s position. The buyer then issues a dispute notice identifying line-item disagreements. If the parties cannot negotiate those, the agreement usually routes the remaining items to an independent accounting firm sitting as arbitrator. The fights cluster around a short list of items. New-vehicle inventory valued at dealer cost versus MSRP less holdback. Aged used units written down or not. Contracts in transit counted as receivables. Warranty receivables from the manufacturer treated as accounts receivable. Parts inventory counted at cost or marked down for obsolescence. In our experience, the buyer who does not send a manager to physically count inventory the night before closing is the buyer who pays too much. The seller who does not require the accountant to sign off on the closing-date balance sheet before wiring the funds is the seller who litigates for the next eighteen months.

Breaking Up is Hard to Do: Resolving Partner Disputes in Closely Held Dealerships

February 14, 2026 | Peter S. Lubin and James V. DiTommaso

Most dealership groups are built by partners. One person has the operational instincts, another has the capital, another brings relationships, and the business grows. That partnership model works until it does not. When the relationship fractures, the dealership cannot hit pause. Cars still have to be sold. Service lanes still have to run. The factory still expects performance. Every day of internal conflict quietly drains value.

We call these cases business divorces because the pattern is familiar. Trust breaks down. Financial transparency disappears. Meetings turn into ambushes. The majority starts treating the minority like an employee instead of an owner. Then the real damage starts: money moves through related entities, opportunities are steered to other stores, and the partner who helped build the business is told to take a discounted buyout or be frozen out.

Valuation deadlocks and why dealerships are harder than most businesses to price. A dealership is not a simple earnings multiple. You are dealing with multiple profit centers: new vehicle, used vehicle, finance and insurance, parts, service, and often separate real estate and management companies. Blue sky is real, but it has to be grounded in facts, not ego. We see partners deadlock over basic issues like whether rent paid to a related real estate company should be normalized, whether “management fees” are legitimate or a profit siphon, how to value used vehicle inventory, and how to treat manufacturer incentive programs that fluctuate year to year. Without a defined valuation process, the loudest voice often wins, and that is how disputes become lawsuits.

Squeezed Out of Your Own Company? Strategies for Freeze-Outs in Closely Held Businesses

November 15, 2025 | Peter S. Lubin and James V. DiTommaso

When Majority Owners Turn on Their Partners

In closely held corporations and limited-liability companies, majority owners sometimes forget that they owe duties to their partners. We see the same pattern again and again: a founder who built a business is gradually cut out of key decisions, denied access to financial information, removed from management, and eventually offered a take-it-or-leave-it buyout at a fraction of what the stake is actually worth.

These “squeeze-out” and “freeze-out” tactics can be subtle—changing compensation structures, diverting opportunities to new entities, or refusing to declare dividends while insiders pay themselves oversized salaries. In more extreme cases, they involve outright fraud: phony invoices to related companies, off-the-books revenue, or manipulated financial statements designed to hide the business’s true value.

We also regularly defend owners wrongfully accused on using freeze-out tactics.

Combining Oppression, Fraud, and Consumer-Fraud Theories

Our firm regularly represents minority owners who have been frozen out of the businesses they helped build controlling owners who allegedly have done that. Depending on the facts, we may bring claims for shareholder oppression, breach of fiduciary duty, common-law fraud, unjust enrichment, and, where appropriate, claims under statutes such as the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/2, when deceptive tactics are used to induce an unfair buyout. We also are experienced at litigating affirmative defenses to these types of claims.

The same kinds of deceptive practices we see in consumer transactions—omitting material facts, presenting misleading financials, and papering over obvious discrepancies—often appear in freeze-out cases. When majority owners present inflated or deflated numbers to justify squeezing out a partner, we treat that as serious misconduct, not “hard bargaining.”

The Role of Forensic Accountants in Freeze-Out Cases

In many freeze-out disputes, the key question is simple to ask but hard to answer: what is the company really worth, and how much value has been diverted? To answer that, we bring in forensic accountants who are experienced in partner and shareholder litigation. They can:

Analyze financial statements, tax returns, and bank records to identify hidden income and excessive insider compensation;
Reconstruct the economic value of the business at key points in time; and
Quantify damages from diverted opportunities, self-dealing, and other fiduciary breaches.

We have worked with experts whose prior cases resulted in courts awarding tens of millions of dollars in compensatory and punitive damages to defrauded business owners after proving that they were induced into or kept in unfair deals by false financial information. That experience informs how we structure our own freeze-out and squeeze-out cases.

Remedies: More Than Just a Buyout

In some situations, the right remedy is a fair-value buyout of the minority owner’s interest, supervised by the court and informed by independent valuation. In others, injunctive relief to stop ongoing diversion of assets or to restore a client to management is critical. Where fraud or willful misconduct is involved, we also seek punitive damages to deter similar conduct in the future.

Because freeze-out tactics can overlap with libel—such as when majority owners make false accusations about a partner to justify their removal—we are prepared to add defamation claims when warranted. Our experience protecting reputations in offline and online settings gives us additional tools when smear campaigns accompany financial misconduct.

What Sets Our Freeze-Out Practice Apart

Our work in squeeze-out and freeze-out cases stands out because we:

Combine corporate, commercial, and tort theories to put maximum pressure on wrongdoers;
Use forensic accounting early to understand where the money has gone and what the business is truly worth;
Are comfortable litigating cases that involve complex deal documents, multi-entity structures, and overlapping personal and business relationships; and
Understand that for many clients, these cases are about more than money—they are about vindication and the ability to move forward.

That mix of legal and financial sophistication is especially important in closely held businesses, where personal relationships and family dynamics often collide with corporate governance. Continue reading ›