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Retirement Planning-Business Exit Strategies-Part 2


By Allan Gold, lawyer, lecturer and author.

Vol. 12, #19.1 – Sept. 15, 2020– ALLAN GOLD’S BLOG

For Family business, Independent business; Local business, Small And Medium Enterprises / SME; Petites et Moyennes Entreprises / PME; etc.

RETIREMENT PLANNING FOR FAMILY BUSINESS OWNERS – BUSINESS EXIT STRATEGIES*: Lessons to be learnt from Frank Stronach/ Stronach Group Saga!*

(Part 2) from one of family law lawyers Montreal / business lawyer Montreal


Last time, I started a blog relative to business exit strategies. In Part #1, I considered the case of Frank Stronach and The Stronach Group. Indeed, it shines a bright light on the problems surrounding the formulation of such a strategy, especially when transitioning a family business to the next generation. Today, I give you Part #2. At the outset, I will provide my take, analyzing a few reasons why a family business transition might be difficult to accomplish. Next, I will enumerate my Top-10 Golden rules when attempting a generational switch in a family business. Let’s go!

  1. Frank & Belinda Stronach Group Saga

B.1 Frank Stronach is a giant of Canadian business of Magna International fame. He was also a founder of The Stronach Group. It does business as 1/ST – it’s an entertainment and real estate company in North America with thoroughbred horse racing and pari-mutuel wagering at the core.

B.2 As you will recall, in mid August, 2020, it was reported that Frank Stronach and Belinda Stronach had settled their case and the fight over The Stronach Group had ended. The settlement appears to have taken the form of a split between the two sides in the family. Belinda Stronach remains chairwoman and president of The Stronach Group and she has full control of its horse racing, gaming, real estate and related assets. On the other hand, Frank and his wife, Elfriede Stronach assumes full ownership and control of a stallion and breeding business, all farm operations in North America and all European assets. While it’s good news for the parties, there are lessons to be learnt by a founder/owner-operator of an independent enterprise, be it to be small, locally-based, mid-size and closely-held or even large, privately owned.

B.3 Comment.

B.3.1 Analysis. The Frank & Belinda Stronach Group court case illustrates how things can go wrong with a business exit strategy. In my belief, it drives home the point that when it comes to a business exit strategy, a founder/owner-operator must select between two broad options. Option “A” is to make a complete break. In contrast, Option “B” is not to make a complete break. And never the twain shall meet!

As to commentary, here’s s my further take. It’s difficult to successfully carry out a business generational transfer. Several reasons are:

  • Character-Nature of Business Founder/Owner-Operator. This man or lady saw opportunity and typically with single-mindedness, launched the enterprise from scratch on a shoe string budget and built it into the small empire that it has become in the present day. It’s therefore understandable that even into retirement, such a person would continue to have strong opinions on many aspects of the business and how the family firm should be run.

  • Role of a Parent. The simple truth is that a parent remains a parent even after children become adults. As the father or mother, he/she has long been telling others in the family where it was at. And going forward, he/she expects that such dynamic shall continue unabated. In this regard, I have an anecdote. When I was in my late teens, my late father drilled into me that it was very important for a man to stand up on his own two feet. He vividly described how his father had nicely and politely told him, that on marrying, he should take the door and find his own way. My grandfather was of the mind that once his son had taken a wife, his job (as a father) was done and that my father should then go out into the world and make a life for himself. That was a nice story, but when it was my turn, there was a big but! When I was a young man in my early twenties, my father spurred me on to bigger and greater things. But once I started to show independence and making decisions for myself, I felt some push back from him. Eventually, we had a sit down. I asked him why he was criticizing me when I was doing things my way, following my own star. I asked, “Didn’t you tell me to stand up on my own feet, figure it out and make decisions for myself?” To this he more or less answered, “Yes, I want you to be a man, find your way in life and make your own decisions, but then with a sheepish grin, he added something like, “Provided and as long as it’s what I want you to do.” And that my friends, is the point. Just like the title of the old TV sitcom, my father thought that “Father Knows Best.” As a result, a parent thinks that he/she should direct things regardless if the child is an adult and now out on his own. The problem is greatly compounded if and when, an adult child has taken over the ownership and/or operation a family business.

  • Friction between the generations. Serious differences in opinion over the family business may break out at any time between parents and adult children and other members of the family. But displeasure at or about the retirement of the founder/owner-operator can get ugly. Often, the new generation has its own set of priorities once it takes over the reins of power at the top. That in turn may be explained by life experiences of adult children being different than those of their parents. And with higher education, young people bring additional skill sets and fresh eyes to the table, such in turn prompting plans to modernize and/or ideas to build in new directions. But the founder/owner-operator might resist these changes. Into the mix, let’s add the pent-up frustration of the adult child after much impatience waiting for his/her chance to lead.

B.4 The ‘Golden’ Rules. Hereinafter are my Top-10 ‘Golden’ Rules regarding Family Business Exit Strategies, such in “Do & Don’t” format. If a founder/owner-operator and thinking about retirement, you might find them of interest.

Dos & Don’ts

Rule #1: Don’t start out on the wrong foot. If you’re looking for the right answer, you need to clearly understand the question. Accordingly, BE informed that a business exit strategy is “an entrepreneur’s strategic plan to sell his or her ownership in a company to investors or another company.” (Source: The sale is a family business generation shift when adult children and/or relatives are taking over from their parents and/or other ascendants. The purpose of a strategic plan of this type is to permit the next generation to accede to the ownership and power/authority and also allow the retiring generation to exit and take some cash for their retirement. That sounds simple enough. But the hard part is in the details!

Rule #2: Don’t delay – if retirement is approaching, MAKE a plan & DO it now! You might say that it’s not yet the time. You could assert that you’re intertwined in your work and you can’t stop doing the job. You could argue that this planning should be put on the back burner due to one reason or another. You could state that people are living longer today. And we’re living a healthier life style and medical science is so much better. You can add that it’s best to wait until you cannot do it any longer and you want out. You could be making sense, but you might have regrets afterwards. You see, bad stuff has a way to happen and it might catch you off guard. This could be a recipe for disaster, since the timing will NOT be of your choosing and this could result in you’re suddenly stepping down. The unfortunate result of being forced to leave by circumstance is that the outcome might be far lees good than it could have been if you would have acted earlier and picked a better time to depart. Indeed, you might feel it right smack in the wallet!

Rule #3: Don’t waffle on the big question. UNDERSTAND the choice:

  • Option “A” is to make a complete break. (100% OUT) This is a full retirement. And on deciding to go, a founder/owner-operator must grasp the fact that he/she is passing the baton and there’s usually no going back. If you don’t want to be 100% gone and out of the picture, then this option is NOT for you.

  • Option “B” is not to make a complete break. (NOT 100% OUT) This is something less than a full retirement. If you want to slow down, then you’re probably thinking about semi-retirement. This could mean working only part-time especially because of age or ill health. In the alternative, you might be thinking about a phased retirement. In this instance, the founder/owner-operator might be intent on retaining the ultimate big decision-making authority, having a say in how things are to be run and perhaps continuing on at the firm in one role or another. If that’s to be the selection, thereupon you should recognize that this is not a complete break and it’s necessary to address the notion of “control” of the corporation. In that regard, KNOW: (a) That it’s a matter of shares in the capital stock and there’s a need to draw up corporate documents such as a Unanimous Shareholders’ Agreement (USA), etc. (b) That the founder/owner-operator might have seats(s) on the board of directors and be a titled officer; (c) That if this exercise is done improperly; it’ll likely cost you dearly …a huge bunch of emotional grief and lots and lots of money in legal fees and expenses.

Rule #4: Don’t take the middle road. Instead, DECIDE if you’re 100% out or not. As a family law lawyers Montreal / business lawyer Montreal, I believe that sitting on a fence is good when watching someone working with a horse in a corral, but it’s not the way to go in the business world. I also assert that in my belief, there comes a time when a founder/owner-operator needs to let go. Just ask a circus aerialist who must jump to the other swing and he/she must let go the one on which he or she is sitting. Indeed, I think that we can all agree that if the aerialist tries to hold onto both, he/she will likely fall!

Rule #5: Don’t blindly trust everybody – this also applies to adult children. Instead, PROTECT yourself by determining what you want and then SEE to it yourself that it be done!

Rule #6: Don’t be mealy-mouthed about your plan for the family business. Instead, SPIT it out and PUT the information out there as soon as possible, to ‘whom it may concern’ in the family. You see, these people deserve to know how you’re thinking so that they, in turn, can make their own decisions, which are necessary in consequence thereof.

Rule #7: Don’t be imprecise on timing. Instead, SET a definite time line and KEEP to the schedule!

Rule #8: Don’t rely on ‘blah blah blah.’ Of course, “Talk is cheap and bullshit walks.” But most of all, this is because it’s likely that nobody will remember what was said and as such, the unwritten understanding will probably not be followed. In other words, don’t be satisfied with an oral agreement. Indeed, an unwritten understanding isn’t the right medium to do a generational transfer of a business. Instead, PAPER your business exit strategy in writing by way of corporate instruments, legal contracts, documents, etc.

Rule #9: Don’t be vague and imprecise. Of course, you don’t want to be say something and be misunderstood. Instead, BE clear. Indeed, you want to reach a place where there’s a ‘meeting of the minds.’ For your information, this describes a situation where there’s a common understanding in the formation of a contract.

Rule #10: Don’t go back on your word. Don’t talk out of both sides of your mouth. BE cognizant that misunderstandings over the transference of ownership and power in a family business can and likely will have terrible consequences. Instead, SAY what you mean and MEAN what you say. And then CARRY through on what was said!


As you age further and get near retirement, you’re approaching a watershed moment in your career and business life. For your information, such is defined as “a turning point, the exact moment that changes the direction of an activity or situation. … is a dividing point, from which things will never be the same. It is considered momentous,…” (Source: said, it’s up to you as the founder/owner-operator in your respective family business, local business, independent business, PME, SME, etc., to plan your exit and decide when and how you shall take your leave. Everyone is different and there isn’t one size that fits all. Like you, I want you to do it right! It’s in your personal interest, for the benefit of you immediate family, but also the stakeholders in your business, be they to be your employees, customers, suppliers, etc. and the community-at-large.*

Quotes of the week (business-wise).

Here are a few great quotes to learn from.

  • “Don’t put off until tomorrow what you can do today.” ― Benjamin Franklin
  • “Don’t trust anyone in this world …Even your shadow leaves u …When u r in the dark”- Karma
  • “If I had an hour to solve a problem I’d spend 55 minutes thinking about the problem and five minutes thinking about solutions.” -Albert Einstein
  • “It’s good to have money and the things that money can buy, but it’s good, too, to check up once in a while and make sure that you haven’t lost the things that money can’t buy.” – George Horace Lorimer

Last word.

It’s a fine line to walk in order to succeed at retirement. It takes planning – more precisely, it takes retirement planning! DO it now- if you wait, it could be too late for you. And THINK hard – KNOW that if you get it wrong- it’ll bite you in the ass and it will hurt big-time, both in your heart and also your wallet!

P.S. It’s not such a bad thing if after taking “GOLD’S COVID-19 BUSINESS PERSON’S APTITUDE TEST” of a family law lawyers Montreal/business lawyer Montreal, and you find your glass more empty than full. This is because you’ve been retirement planning and you can then say, “Retirement here I come!”

― Best wishes to each of you and to your entire family.*
Allan J. Gold

Avocat/Barrister & Solicitor
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I believe that with this blog series, I may have started you along the way to being more aware of the law for business. I have now started a series on retirement planning. As of late, I’ve been addressing the topic of Business Exit Strategies. This time, I’m completing my commentary on the Frank Stronach & Stronach Group case. Next time, I will look at the Health Care Fight case involving Sumner Redstone, the U.S. billionaire media mogul, who died on Aug. 11, 2020 at the age of 97. Interested? Want to get more information about the current topic, retirement planning or other areas of law written by an “avocat,” one of the family business law lawyers, a business lawyer Montreal, practicing also in the elder law field? See you next time. It won’t take too much time. Remember my byline – it’s “Gold’s Legal Minute*GLM*!” And please don’t forget to join my professional community by entering your e-mail at the prompt.*


The material provided herein is of a general nature, strictly for informational purposes. The interpretation and analysis is not to be misapplied to a personal situation with a particular set of facts. Under no circumstances, are the herein suggestions and tips, intended to bring a reader to the point of acting or not acting, but instead, the hope is that they are to be a cause for pause and reflection. It is specifically declared that this content is not to be a replacement of, or a substitution for, legal or any other appropriate advice. To the contrary, for more information on these presents, related subjects or any other questions, it is the express recommendation of the author that everyone seek out and consult a qualified professional or competent adviser.

*©/TM 2020, 2019, 2015-2018, Allan Gold, Practitioners’ Press Inc. – ALL RIGHTS RESERVED

** ©/TM 2006, 2008, 2018 Allan Gold, Practitioners’ Practitioners’ Press Inc. – ALL RIGHTS RESERVED


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