You don’t have to burn the business down to end the relationship. Corporate divorce is about protecting value—clients, cash flow, brand, and momentum—while separating owners cleanly. Whether you’re in New York or New Jersey, the smartest moves happen before papers are filed.

Start With Value: What Are We Protecting?

• Revenue engine: key accounts, recurring contracts, pipeline, AR.
• People: core staff you can’t afford to lose during uncertainty.
• IP & data: brand, domains, source code, client lists, trade secrets.
• Cash & credit: banking authority, credit lines, vendor terms.

Every step you take should be judged by one test: Does this protect or destroy value?

NY vs. NJ: What the Law Lets You Do (Plain English)

New York: If it’s no longer “reasonably practicable” to carry on the business (deadlock, misconduct, paralysis), courts can dissolve or craft equitable relief. Your Operating Agreement controls first; if it’s silent, case law and the LLC Law fill the gaps.

New Jersey: Under the Revised Uniform LLC Act, courts can order judicial dissolution or dissociation of a member when conduct is oppressive, unlawful, or makes operations impracticable. NJ’s statute expressly supports pragmatic remedies to keep value intact while separating owners.

The 7-Step Corporate Divorce Playbook

1. Stabilize governance. Confirm who can act today (manager-managed vs. member-managed). Call a formal meeting with a tight agenda: payroll, client deliverables, banking access, insurance, and vendor approvals. Take minutes—they become evidence.
2. Lock down the crown jewels. Secure banking (dual controls), IP ownership records, domain/hosting credentials, CRM and accounting access, and confidentiality reaffirmations for staff. Update password management and revoke unnecessary privileges.
3. Paper the facts. Send a professional notice of issues summarizing non-performance, deadlock points, and immediate business risks. Offer a cure window and a meeting date. You’re building a record and signaling reasonableness.
4. Pick the separation path. Options include (a) negotiated buyout; (b) spin-off/asset swap; (c) wind-up and sale; or (d) petition for judicial relief (dissolution/dissociation). Choose the least destructive route that actually works for your facts.
5. Agree on valuation first, dollars second. Decide the method (appraisal, CPA formula, revenue multiple, independent valuation) and timing. Price fights are where value dies—align on the yardstick before arguing the number.
6. Draft a deal that actually closes. Bulletproof term sheet: payment schedule and security (UCC liens, confession of judgment where appropriate), releases/mutual non-disparagement, transition support, client communications plan, tax allocations, and post-closing covenants.
7. Escalate surgically. If the other side stalls or sabotages, seek targeted relief: temporary orders to authorize essential business actions, appointment of a neutral to supervise specific tasks, or a limited dissolution/dissociation application focused on feasibility—not vengeance.

Three Common Scenarios (Composite, Not Hypotheticals)

• 50/50 deadlock with payroll at risk: Minutes + emergency meeting; short-term operations order; simultaneous valuation and buyout negotiation with security for payments.
• Operator vs. investor split: Operator keeps going-concern assets and staff; investor receives secured payout with waterfall tied to cash collections—value preserved, litigation avoided.
• Family-owned breakup: Use a neutral valuation and a scripted client-notice plan; non-disparagement and confidentiality terms protect the brand during and after transition.

Mistakes That Kill Value

• Letting rumors run the client comms. Have a single, professional message and send it promptly.
• Fighting about price before method. Resolve valuation approach first, then apply numbers.
• Raiding accounts or data. Looks bad in court, worse with staff, catastrophic with clients.
• Skipping security on buyouts. If payments are spread over time, secure them—UCC filings, guarantees, or confessions of judgment where appropriate.

Your First 10 Days: A Simple Checklist

• Audit authority: banking, payroll, vendor portals, insurance, leases.
• Inventory IP and data; confirm ownership and access.
• Freeze non-essential spending; keep mission-critical vendors current.
• Calendar member meetings and set agendas with decision items.
• Prepare a client/staff communications plan—professional and coordinated.
• Choose a valuation path and identify your neutral.
• Draft a term sheet that can close without court intervention.

This article provides general information for NY/NJ business owners and is not legal advice. Specific outcomes depend on your Operating Agreement, company history, and state law.