Mixing business and pleasure is widely regarded as dangerous, but mixing business with family can be explosive, especially when that business is started with the proceeds from an attempted murder and results in a vicious battle in the High Court.
Last week, a father and his multi-millionaire son stood before a judge and asked for a decision on who owned a £17.5m turnover courier business, employing 80 staff.
Simon Marsh, 35, who started the company, Time Critical Management, with the compensation money he received after being attacked by two men who were trying to murder his father, walked from court victorious after the judge dismissed his father’s evidence as ‘to a large extent, fictitious’.
Roger Marsh, 66, who told the court he had dedicated his life to helping his dyslexic son, claimed he owned 50% of the courier firm set up in 1996.
He told the court he was entitled to half the business as it was founded in his council house in Battle, East Sussex, and because he had helped to get the business up and running.
During the seven-day hearing, Marsh junior claimed that his father was trying to seize control of the business but had no right to a share.
He told Financial Mail: ‘I received £10,000 from the Criminal Injuries Compensation Board that I partly used to buy a van and start up a courier business. My father is living on another planet if he believes he owns half the company.’
Marsh told the judge that he believed his father was targeted by the two men over allegations of violence towards his father’s ex-wife. He said he was hit with iron bars when he intervened to help him.
Though some of the biggest names in British industry – Cadbury, WHSmith and Sainsbury’s – were nurtured down family generations, spectacular feuds between family members have torn others apart.
Dr Michael Sinclair, a director at London-based City Psychology, said people looking to start companies should be extremely cautious about family and business.
‘The old and wise adages of “never mix business with personal matters” or “avoid working with friends and family” are ones that are not to be taken too lightly,’ he said.
‘The firm professional boundaries of a working relationship are exactly what keep working relationships and businesses successful and do not easily transfer or comfortably sit over personal relationships, where a whole host of other emotional dynamics exist.
‘We tend to want – but at times can also feel obliged – to help our closest, nearest and dearest, but this can prove rather problematic when we are talking about doing so within a financial or business context.’
The passions that can erupt over family businesses have been aired frequently in the High Court in recent years.
For example, there was the feud within the multimillion pound Patak Indian food empire when two sisters won a case against their brother to inherit £3m of shares in the business.
Last year Jimmy Choo co-founder Tamara Mellon won £6 million in a long-running legal battle with her 70-year-old mother, Ann Yeardye, for the return of shares mistakenly paid into a family trust.
Then there was the protracted Cayzer clan war in 2002. The family members who represent the secretive Cayzer dynasty, who control a major stake in Caledonia Investments, fought to gain control of the business.
Caledonia owns valuable stakes in high-profile City institutions such as merchant bank Close Brothers and fund manager Friends Ivory & Sime.
Nigel Cayzer, along with his uncle, led the rebel members of the Cayzer clan in their dispute over the ownership of the business. The rebels were eventually bought out by Caledonia.
Family lawyer Robert Hush at law firm Blacklaws Davis in south-east London, said: ‘The problem of running a business between family members is that they always trust each other and tend to be less cautious.
This can result in a business being set up without any formal process or legal advice and in some cases no documentation. This can cause serious misunderstandings later down the line.
‘My advice would be to treat someone in the family as a stranger when starting a business. Points to be discussed should be – what they want to achieve, expectations, their share of profits and liabilities and what happens when someone wants to sell or leave the company.’
As Marsh senior told Financial Mail: ‘I never thought for a moment that I needed to have something in writing. You don’t when you’re dealing with your own son.’
It was one of the most costly mistakes of his life, he said. With £120,000 of legal costs to pay, he may be right.