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Family feuds and the root of all evil

It always boils down to money – disputes that is. You have to feel sorry for family businesses, doubly so for the ones gone public. The scrutiny they bear from shareholders, the press and even their own family members can be merciless. But bickering, as any tabloid hack will tell you, makes for gripping copy. The good bit? There is something to be learned.

Many a family business dispute has ended up as a lengthy, high profile court case. The most recent involved Patak's, the family food firm that grew from a single room operation in north London to a curry empire turning over £50m a year. It had been at the centre of a vicious family feud with insults flying as merrily as the writs. In the end, two sisters trousered £8m when their brother, Kirit Pathak, agreed to hand over their inheritance after a bitter dynastic feud. For the tabloids it was cannon fodder: Kirit, whose picture hangs in Britain's National Portrait Gallery, branded his sisters "wicked and greedy gold diggers". His younger brother, Yogesh, hit back, claiming the tycoon "would make Machiavelli look like Mother Teresa". The sisters, meanwhile, complained they were victims of an Indian tradition that decrees only sons will inherit the family business interests. "This was not about the money," one said. Really?

On the other side of the Atlantic the Pritzker family, whose fortune included the Hyatt hotel chain and an interest in the Royal Caribbean Cruises, has endured the ignominy of a gripping and very public court battle over money. Two cousins, alleging that they were cheated out of their inheritance, sued family members. Today, two separate cases are wending their way through the US court system concerning the same issue: how the $15bn Pritzker family empire should be carved up among the grandchildren of AN Pritzker.

The Pathaks and Pritzkers are not the first families to allow private disagreements to spill into their business affairs. Take Littlewoods for example. Once one of the largest private companies in Britain, Littlewoods imploded because of internecine warfare between family factions. Today the retail empire founded by Sir John Moores has been sold, but ever since he retired 30 years ago his family has squabbled over what should become of the business. While the founder maintained right up until his death in 1993 that the firm should stay in the family, he risked the wrath of his offspring, famously declaring, "the business is more important than my sons". Some would call this lunacy. Others might brand it capitalism in its purest form. Either way, feuds prove it's tough to mix business with blood.

Few have gone as far as the Gucci family. Their troubles started in 1983 when Maurizio Gucci inherited 50% of the company from his father. With the other half of the business in the hands of a number of relatives, Maurizio leapt at the chance to take control of the business. But the relatives rebelled, instigating a bitter battle that was to last for six years. Boardroom meetings frequently broke into violence. One relative was jailed for tax evasion after a tip-off from another. The feud ended in 1989 when the relatives sold their share to an investment company. Four years later Maurizio was forced to follow suit. In 1995 he was murdered in a plot involving his ex-wife.

These are extreme examples but they are real. Family-run businesses, as commentators often point out, tend to outperform their non-family counterparts. But fabulous success exacts its price. What price success? Perhaps it's time to first re-define success.

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