The seminar, “Five Family and Closely Held Business Crises and How to Avoid Them,” was sponsored by the Fordham Institute for Family and Private Enterprise (FIFPE) in conjunction with HSBC Bank. It was held at HSBC headquarters on Fifth Avenue in Manhattan.

Considering the deteriorating economic climate, it seems there has never been a more important time for the family business to succeed, said Howard P. Tuckman, Ph.D., dean of the Graduate School of Business Administration (GBA) at Fordham.

Tuckman explained that there are roughly 180 family business centers at universities across the United States, but very few centers have survived in the New York area.

“That’s why Fordham has made a commitment to work with family businesses,” he said.

“We really do feel—at the both the faculty level and staff level—that with centralization about to take place due to regulation and many other cautions, it will continue to be the family business center that brings vibrancy and change,” he said.

The seminar was an opportunity for people linked to family businesses to network and learn how to protect their firms. Using video vignettes, the following scenarios were discussed:

•    Trying to beat “Uncle Sam” by not paying taxes or not working with financial experts.
•    Not putting a succession plan in place.
•    Not having the company appraised on a consistent basis.
•    Not having a will or estate tax plan, or failing to make a retirement plan.

“Clearly, no one likes to pay taxes,” said panelist Lance Myers, a partner at Holland and Knight LLP. “That’s why it’s important to start gifting plans early. If you gift interest to family members, you have less in your pocket and therefore are going to pay less in capital gains taxes.”

Patrick McCarron of Mass Mutual Financial Group discussed ways to insulate these businesses from the devastation that can occur if an owner dies or becomes disabled.

“You have to come up with a transition plan,” McCarron said. “Succession planning is important, as is getting disability and business overhead expense insurance. Draw up clearly defined roles for family members and key employees.”

Other advice given at the seminar to family owned and closely held businesses includes:

•    The business should be appraised on a consistent basis and a buy/sell agreement should be put into place.

•    Family or closely held business owners should have up-to-date wills and estate tax plans. Funding vehicles should be put in place to pay estate taxes.

•    Owners should have a retirement and post-retirement income plan in place and this plan should be reviewed yearly.

Established in 2008, the Fordham Institute for Family and Private Enterprise (FIFPE) is a business community outreach program of the Graduate School of Business Administration. FIFPE serves the educational and networking needs of leading owners of family firms and closely held businesses. It is part of the University’s Bert Twaalfhoven Center for Entrepreneurship. Holland and Knight LLP, CBIZ Mahoney Cohen and Lincolnshire Management are partners of FIFPE.