In this issue
Albert Lundberg’s gift to his family just keeps on giving. A pioneer in sustainable farming who died in 1970, he passed on a legacy of respect for the land and a zest for experimentation to his sons, grandchildren and, now, great-grandchildren. Seventy-two years after Albert started growing rice in California’s Sacramento Valley, the family is still farming —and doing it their way. Embracing values transmitted from the first and second generations, the third generation has turned Lundberg Family Farms into an exemplary workplace and model of good corporate citizenship.
In today’s tight credit market, family businesses often must turn to their shareholders for financing. Over the past ten years, however, more bankruptcy courts have assumed the power to recharacterize shareholder loans as capital contributions, which are not returned until all other obligations are paid in full. Understanding the factors that bankruptcy courts consider when asked to recharacterize a loan will help you structure shareholder loans to increase the likelihood that they will be recoverable in bankruptcy.
Tom, Kevin and Larry Walter, three brothers who own Tasty Catering, an award-winning business catering company, have set an ambitious goal: being one of the best known and most highly regarded companies in their industry. Their Chicago-based company, which employs 52 full-time and 150 part-time seasonal workers, is well on the way to realizing that vision.
Today’s challenging economic times have given smaller organizations an unprecedented opportunity to recruit corporate executives, according to recent news reports. In the past, few employees of large corporations would have considered working for a smaller firm. Now, with economic chaos the norm, displaced corporate executives are looking for opportunities with smaller firms.
“We didn’t invent it, we didn’t build it, but we’re downstream to service it,” says Todd Duncan, third-generation chairman of Duncan Aviation Inc. in Lincoln, Neb. The company is the largest family-owned aircraft support organization in the world, with 1,850 employees in two fixed maintenance facilities, 22 satellite facilities and seven rapid response centers around the country. Duncan Aviation generates annual revenues of $300 million, on average.
How to compensate workers has been a dilemma since the hunting and gathering societies. From communism to capitalism mankind has questioned the value of work, education, time and brawn. Even within capitalism, employment reward systems range from “performance bonus” to “union scale.”
When I was a kid, our family business seemed to exist more as a “who” than as a “what” —a big, looming presence in the family. Always referred to among family members merely as “the business,” it came up in dinner conversations and in any discussion my father and aunt ever had regarding their upbringing.
Most people who read about the recent rash of business failures would cite the economy as a major cause. Closer consideration, however, suggests a much more complex analysis. In fact, in the 28 years I’ve spent as an adviser to troubled privately held and family-owned businesses, it’s become apparent that owners with CEO responsibilities hold their companies’ fate in their hands. Furthermore, it’s become painfully clear that every one of these failed owner/CEOs had crucial weaknesses in their management skill sets that contributed significantly to their companies’ demise.