The perils of owning and managing a family business are a regular feature of www.campdenFB.com, writes Katie Barker. Sibling rivalry, a lack of succession planning and leaders who are unable to let go are just some of the problems that can result in family feuds, PR catastrophes or even the sale of the business.
Many not-so-famous families encounter these problems, but only the ones that manage to work through them put themselves in a position to pass the business onto multiple generations.
Here are five recent examples to learn from:
The Bettencourts – mother-daughter feuding
Liliane Bettencourt is the 87-year-old heiress to the France-based L'Oreal group. As the only child of L'Oreal's founder, Bettencourt was ranked the 17th richest person in the world last week.
However, a feud with her daughter is threatening to tear the family apart. Francoise Bettencourt Meyers has battled to get a case to court that calls into question her mother's mental health after Bettencourt gave away almost €1 billion in gifts, cheques and life insurance policies to a friend Francois-Marie Banier. Bettencourt Meyers claims the gifts were coerced out of her elderly mother when she was not fully in command of her facilities, an allegation strenuously denied by Bettencourt.
Before the courtroom battle, Bettencourt had promised her 31% share of L'Oreal to her daughter. The court decision, expected this summer, and the fact the two women are reportedly still not on speaking terms, may have some impact on this. Click here to read more about the mother-daughter feud
The Pritzkers – resentment of disconnected family members
The Pritzkers are one of the US's most prominent families. Founders of the Hyatt chain of hotels, the family looked in a good position to retain ownership of the empire after the death of their patriarch, Jay Pritzker, in 1999.
He left a clear succession plan in place concentrating power in three third-generation family members, all of whom had been directly involved in the management of the business. Jay also requested the family keep its fortune together and continue to grow its wealth.
However, he did not account for the problems that arose from the other third-generation family members who were not part of the business management. Not content to live on their dividend, eight cousins felt cut out of important decisions. The tension that arose from these feelings eventually led to a private family agreement in 2001 to split their wealth between 11 third-generation cousins and carve up the business empire.
This division has not always gone smoothly, creating two inter-family lawsuits in the nine years since the agreement was first reached, the last of which threatened the ultimately successful IPO last November. Click here to read more about the Hyatt Hotels IPO
The Porsches – motor-powered struggle between cousins
No account of high-profile family problems would be complete without mentioning the Porsche-Piech family. Third-generation cousins Wolfgang Porsche and Fredinand Piech are both the grandsons of Porsche's founder and head Porsche and Volkswagen respectively. However, their relationship has been anything but idyllic since Wolfgang's unsuccessful bid to overtake his cousin's much larger firm.
The attempt saddled Porsche with a crippling €10 billion of debt and, in a dramatic turnaround of fortunes, left the luxury sportscar maker needing the help of VW to survive. The two announced they planned to merge in May 2009, but constant public feuding between the cousins meant merger terms were not agreed until August that year.
In an attempt to show who would be leading the newly merged company, Piech forced the resignation of Porsche's non-family CEO Wendelin Wiedeking. It is clear who now has the upper hand in the family dispute. Click here to read our coverage of the Porsche/Piech saga
The Redstones – leader's iron grip
Sumner Redstone, second-generation head of National Amusements, grew his father's movie theatre business into one of the biggest media empires in the world.
But Sumner was so intent on retaining control of the company he sacrificed his relationship with his two children Brent and Shari. He asked them to side with him against their mother in divorce proceedings and to relinquish their voting share in order that he would have more control. Shari agreed and was rewarded with the CEO role at the family's holding company, while Brent refused and was left with a minority stake.
The agreement has not solved the family's problems, so after Shari was made CEO, Sumner retracted his endorsement of her, meaning she may now never lead the company.
It is not only his children who Sumner has alienated. Last December, he won a legal dispute brought by his own nephew Michael Redstone over shares worth millions of dollars. Click here to read more about Sumner Redstone's dispute with his nephew
The Ambani brothers – no succession plan
Despite being two of the richest men in the world, it seems money cannot buy harmony in the Ambani household. The brothers, Mukesh and Anil, inherited their father's Reliance empire upon his death in 2002, but that was just the beginning of their problems. Their father left them a business worth billions, but he did not leave them a succession plan.
Consequently, in 2005 with their mother's help they split the empire into two separate conglomerates. However, this did not end the very public spats that continue today. Click here to read more coverage of the Ambani brothers' latest feud
The next issue of Campden FB features an exclusive interview with Peter Thornton of the UK chocolate makers about the issues in his family business. Not already a subscriber? Click here to subscribe