The document summarizes a presentation on mediating family business disputes to prevent generational and sibling conflicts. It discusses common issues in family businesses related to succession, employment, profits distribution and management. It notes that underlying family business disputes are often issues of fairness, respect, communication and systemic family dysfunction. The presentation reviews tools for mediators, including determining if the family or business system is dominant and addressing the real problems and interests of all involved parties to keep the family intact.

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6. (312) 549-1350 (o)
(312) 848-1350 (c)
Warren.Baker@dbr.com
191 N. Wacker Dr., Ste. 3700
Chicago, IL 60613
Phillips Academy Andover
1966
University of Pennsylvania
B.A. 1970
The John Marshall Law School
J.D. 1975
Warren has been counseling families and their enterprises as their primary counsel on
a wide variety of issues for over 35 years. Having substantial experience in complex
commercial litigation, arbitration and mediation, often involving family and privately
owned enterprises, Warren focuses his practice exclusively on conflict avoidance
and resolution for families and family owned businesses. Recognizing that family
cohesion is often a key component of enterprise health and generation-to-generation
sustainability, Warren uses a non-adversarial approach as a third party neutral
facilitator and mediator in finding solutions to family and family enterprise conflict. The
many families and enterprises Warren has worked with value his objectivity and ability
to resolve what are often emotionally charged issues.
Warren maintains many active charitable and civic commitments that have included
for many years serving as a Big Brother mentor with Big Brothers Big Sisters of
Metropolitan Chicago. Warren has also served on the Executive Committee of the
Capital Campaign for the Big Brothers Big Sisters of Metropolitan Chicago and the
Capital Campaign Committee for the Latin School of Chicago. Warren was a co-
founder of the Phillips Academy Andover Abbot Regional Association and remains
active as its President.
Warren and his wife, Deborah, live in Chicago and have two daughters who are
working in the not-for-profit field.
Professional Affiliations
Member of The Family Firm Institute (FFI);
Chapter Officer, FFI Midwest Chapter.
Member of the Association for Conflict
Resolution (ACR), active in the Family,
Commercial, Workplace and Elder
Sections.
Member of the Commercial Section
Advisory Council.
Founding member of the Family Owned
Business Group within the ACR’s
Commercial Section.
Routinely presents at industry conferences
as well as to family offices and trust
companies.
Facilitator and Certified Mediator
Avoiding & Resolving Conflicts
Received his Mediation Certification at
Northwestern University.
Leads the firm’s Alternative Dispute Resolution
(ADR) Task Force.
Has facilitated or mediated issues in innumerable
matters for families and family enterprises,
including those involving succession,
governance, sustainability, wealth transfer, exit
strategies, among many others.
Advises single and multi-family offices, bank
trust departments, trust companies and wealth
management firms on strategies to help their
clients avoid and resolve conflict.
Peer Review Rating
AV Preeminent - 5 out of 5 — The Highest level of
excellence as rated by his independent peers.
(Martindale-Hubbell)
Warren Baker Partner

7. WORKING WITH FAMILY
3 pathways that strengthen the family and the
business.
A framework to understand health family
enterprises.
Association for Conflict Resolution Conference

8. Working With Family…
• Is very common
• Incredibly rewarding
• The returns can be much more than money
• Socio-Emotional Wealth & Financial Wealth
• There are risks…
• Values and work-styles can be at odds
• Credibility can erode
• Damage to family relationships
• Financial loss

9. Three systems working together
Family
BusinessOwnership

10. Three systems working together
Family
BusinessOwnership
• Issues in one sphere impacts
the others
• People Have Multiple roles
• Unconditional & merit based
relationships present

11. The Research
• Three Pathways to Evolutionary Survival: Best Practices
of Successful, Global, Multi-Generational Firms
• Completed by Dennis Jaffe with support from Family
Business Network and Family Office Exchange
• Surveyed 192 global family firms
• Average worth of $400mm
• Age of the businesses ranged from 1st & 2nd generation to 7
generations.
• Asked… “what do you do to keep the family firm alive and
thriving from generation to generation?”

12. The Research
Stewarding
the
Enterprise
Developing the
Next
Generation
Nurturing
the Family

13. The Research
Pathway 1: Nurturing the Family
• Clear compelling family purpose and direction
• Regular family gatherings
• Climate of openness, trust and communication
• Sharing respect for family history and legacy
• Shared family philanthropic and community
service

14. The Research
Pathway 2: Stewarding the Family Enterprise
• Strategic plan for family wealth and / or enterprise
development
• Active, diverse, empowered board guiding each enterprise
• Transparency about financial information and business
decisions
• Explicit and shared shareholder agreements about family
assets
• Exit and distribution policies for individual shareholder
liquidity

15. The Research
Pathway 3: Cultivate Human Capital for the
Next Generation
• Employment policies for family members working in the
family enterprise
• Agreement on values about family money and wealth
• Support for development of next generation leadership
• Encouragement for all family members to seek personal
fulfillment and life purpose, regardless of personal or
financial involvement in family enterprise
• Age-appropriate education to teach financial skills to
young family members

16. Simply put…
• Pathway 1…. keeping family connected
• Pathway 2… business policies and structures
• Pathway 3… planning for the future

17. Associa on for Con¯ict Resolu on
2013 Annual Conference
Workshop—October 11 at 10:30 am
Family Business Disputes: How Media on Techniques can help Prevent
Genera onal and Sibling Con¯ict from Killing the Proverbial Goose
Ma hew L. Caras
Leaders LLC
Portland, Maine
(207) 318 1893
MCaras@Leaders LLC.com

18. Smith Company
Don Smith, CEO
age 70
20% wants to cash out
Joe Jones, President
age 67
20% wants legacy
Jane Smith
Not An Employee
age 36
6%
cash out
Frank Smith
Sales Manager
age 34
12%
career
Al Smith
COO
age 32
6%
legacy
Jon Jones
Engineering Manager
age 39
10.5%
cash out
Ann Jones
CFO
age 40
15%
legacy
cousins
Don’s children – 30% total
6% total to
3 children
4.5% total to 3
children
Joe’s children 30% total
Al’s children
Jon’s children
Total Company
41% Cash out (through sale or buyout)
47% Legacy (no sale; no debt for buyout)
12% Career (need for put op on)
By Smith Family
52% Cash out
24% Legacy
24% Career
By Jones Family
30% Cash out
70% Legacy

19. Smith Company, a second genera on family owned business founded by ®rst cousins Don Smith and Joe Jones, is a
petroleum marke ng company with annual revenue of $600 million. The Company is pro®table, but its working capital requirements
are high. The Company has signi®cant market/enterprise value and would be an a rac ve acquisi on for a strategic buyer.
The founders, Don Smith and Joe Jones, are about 70 years old. Don has three children between 32 and 36 years old, two of
whom work in the business. Joe has two children, age 39 and 40, both of whom work in the business. There are a total of 10
grandchildren, ranging from 5 to 18 years old, none of whom work full me in the business.
For years Don and Joe each owned 50% of the Company. Several years ago Don and Joe agreed that each would give 30% of
his stock to his children. Thus Don and Joe each currently owns 20% of the Company.
Don and Joe want to re re. However, Don would like to cash out at the me of re rement and Joe’s wish is for Smith
Company to con nue to be owned and operated by the Smith and Jones families inde®nitely. The heir apparent to run the Company
upon the re rement of Don and Joe is either Don’s son, Al (who is COO), or Joe’s daughter, Ann (who is CFO). While Al and Ann
would like the Company to be a legacy family business, each has a sibling who wants to cash out now. The ® h member of the
second genera on doesn’t care what happens as long as he con nues to be employed and has a means to exit when he wants to
re re in the future.
There is no shareholder agreement, and votes follow shares. Sale of the Company will sa sfy the objec ve/demand of about
half the ownership that wants to cash out, but will not achieve the objec ve/demand of those who want to keep the business in the
families. Those who want to con nue to own and operate the business are not willing to consider a buyout of the others because the
debt the Company would incur in connec on with the buyout would make the Company vulnerable and without the working capital
necessary to con nue growing.
There exists a deadlock, with poten al for li ga on—the outcome of any li ga on is unpredictable because there is no
apparent legal basis for any ac on by one fac on or family against the other. It appears that a consensual resolu on is the only way
to avoid a paralysis that would cause irreparable harm to the Company. But what possible resolu on exists where the objec ves/
demands of all family members are sa s®ed?
A crea ve transac on, focusing on the interests of each party involved, was the resolu on that allowed each member of the
Smith and Jones families to accomplish his or her individual objec ves. Use of a neutral nego a on facilitator with investment
banking experience as well as media on skills was cri cal in nego a ng and closing the transac on. A “merger of equals” was the
transac on that resolved the deadlock. The merger target was a company that lacked successor management (a strength of Smith
Company) and that as a result was willing to permit MergeCo to be controlled at the board level and managed on a day to day basis
by members of the Smith and Jones families, provided the owners of the target retained a roughly 50% ownership interest in
MergeCo. The combined balance sheets and cash ¯ows of the two companies provided the ability to structure put op ons for family
members who wanted to cash out.

20. “FAMILY BUSINESS DISPUTES : HOW MEDIATION
TECHNIQUES CAN HELP PREVENT GENERATIONAL AND
SIBLING CONFLICT FROM KILLING THE PROVERBIAL GOOSE”
STAGE ONE RELATIONSHIP AND SUCCESSION ISSUES
ACR ANNUAL CONFERENCE
OCTOBER 11, 2013
RICHARD LUTRINGER
MEDIATION OFFICES IN
NEW YORK CITY AND SOUTHERN CALIFORNIA
RLUTRINGER@MAC.COM
MEDIATE.COM/RLUTRINGER
I. FAMILY BUSINESS DISPUTES/ISSUES INCLUDE :
SUCCESSION [SELECTING, NURTURING, TIMING,
RETIREMENT OF FOUNDER]
EMPLOYMENT EXPECTATIONS [HIRING
STANDARDS, LEADERSHIP ROLES, RELATIONSHIP
TO NON-FAMILY EMPLOYEES]
DISTRIBUTION OF PROFITS [BEFORE, DURING
AND AFTER SUCCESSION]
ONGOING MANAGEMENT / SALARIES/ PERKS [OF
SIBLINGS WITHIN BUSINESS]
II. THE “FOURTH CIRCLE” — LEGAL BACKGROUND
GENERALLY, 51% = ABSOLUTE CONTROL OVER
ORDINARY BUSINESS DECISIONS [I.E. LIMITED
DEMOCRACY]

21. “BUSINESS JUDGEMENT RULE” LIMITS COURT
REVIEW OF MANAGEMENT DECISIONS
WITHOUT PRE-EXISTING BUY-SELL OR
MANAGEMENT AGT, MINORITY MAY BE LIMITED
TO THE “NUCLEAR OPTION”—SEEK DISSOLUTION
[CORP :DUE TO OPPRESSION OF MINORITY,NY
BCL SEC. 1104-A; LLC “NOT REASONABLY
PRACTICAL TO CARRY ON THE BUSINESS IN
CONFORMITY WITH THE…OPERATING
AGREEMENT” NY LLCL SEC. 702]
III. ISSUES REALLY UNDERLYING FAMILY BUSINESS
DISPUTES :
FAIRNESS
RESPECT
CONFUSION OF FAMILY AND BUSINESS ROLES
“CULTURAL” DIFFERENCES (GENERATIONAL,
GENDER, BIRTH ORDER, ETC)
LACK OF COMMUNICATION [WITHHOLDING
INTENTIONS OR CONFUSING MESSAGES]
SYSTEMIC DYSFUNCTION : SUBCONSCIOUS
COLLABORATION OF FAMILY MEMBERS TO

22. PROTECT THE SYSTEM FROM UNDISCUSSED
FEARS AND ISSUES [MORE THAN A MEDIATOR’S
JOB-BUT AWARENESS OF ISSUE CRITICAL]
LAIUS COMPLEX
IV. FAMILY BUSINESS DISPUTE OUT –ORANGE COUNTY
CHOPPERS (VIDEO CLIP)
GENERATIONAL CLASH OF FATHER (80%
OWNER/CEO) VS. SON (20% OWNER/ SR
EMPLOYEE)
CLIMATE OF OPENNESS, TRUST, RESPECT AND
COMMUNICATION ?
CLEAR EXIT POLICY ?
AFTERMATH
V. TOOLS OF THE FAMILY BUSINESS MEDIATOR
DETERMINE WHICH SYSTEM IS DOMINANT –FAMILY
OR BUSINESS [LOOK FOR SYSTEMIC CAUSES,
RATHER THAN FOCUSING ON THE IMMEDIATE
ISSUE]
WHAT IS THE REAL PROBLEM ? IS THE BUSINESS
ISSUE RELATED TO “UNFINISHED BUSINESS” IN THE

23. FAMILY SYSTEM ? DOES THE PROBLEM INVOLVE
“SCAPEGOATING” (E.G. WHO CAN WE BLAME ? )
ENGAGE ALL INFLUENCERS ( WHICHEVER CIRCLE
THEY FALL INTO)
DISTINGUISH ROLE AS MEDIATOR FROM FAMILY
BUSINESS ADVISOR
UNLIKE MEDIATION OUTSIDE OF A FAMILY
RELATIONSHIP, IF PARTIES “WALK”, FAMILY
PROBLEM NOT RESOLVED BY MONEY/COURT
[DIFFERENT BATNA]
UNDERLYING “INTERESTS” AMONG ALL PARTIES
OFTEN THE SHARED INTEREST OF KEEPING THE
FAMILY INTACT---RECOGNIZE THAT FAMILY
BUSINESS DISPUTES CAN SPAN GENERATIONS
AND ARE RECURRING DISPUTES [SEE MAYER,
STAYING WITH CONFLICT ]
REFERENCES :

24. DISTELBERG AND SORENSON”UPDATING SYSTEMS
CONCEPTS IN FAMILY BUSINESSES” (22 FAMILY
BUSINESS REVIEW, MARCH 2009,) PP. 65-81
HILBURT-DAVIS AND DYER, CONSULTING TO
FAMILY BUSINESSES ,
(JOSSEY-BASS/PFEIFFER, 2003)
KAYE , “PENETRATING THE CYCLE OF SUSTAINED
CONFLICT” (THE BEST OF FBR II, 1991), P. 283
LUTRINGER, MEDIATING BUSINESS DIVORCE
DISPUTES”, NEW YORK DISPUTE RESOLUTION
LAWYER, NEW YORK STATE BAR ASSOCIATION
(FALL 2009)
MAYER, STAYING WITH CONFLICT , JOSSEY-BASS
(SAN FRANCISCO 2009)
SPECTOR, THE FAMILY BUSINESS CONFLICT
RESOLUTION HANDBOOK, FAMILY BUSINESS
PUBLISHING CO. (PHILADELPHIA, 2003)

25. TEUTEL V. TEUTEL, 2010 NY SLIP OP 09248 (2D
DEPT DEC. 14, 2010)
Richard Lutringer is a private mediator
in New York City. He has been certified as a commercial
mediator by the Centre for Effect-
ive Dispute Resolution (CEDR), the American
Arbitration Asssociation (AAA), and the Internat-
ional Mediation Institute (IMI),as a community mediator by
CMS, Queens, NY and is on the
mediation panels of FINRA, NADN and federal district courts
in New York and New Jersey.
Disputes mediated by Mr. Lutringer include disputes among
members of family owned
businesses as well as domestic and international industrial,
investment and financial companies.
Mr Lutringer has been a member of the Board of Directors
of ACR-GNY and is currently a member of the board of the
New York State Dispute Resolution Association. He has
been a regular competition judge and mediator for the
International Chamber of Commerce Annual Mediation
Advocacy Competition. Full bio available at
mediate.com/rlutringer