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Rock, Paper, Scissors, Lizard, Spock and Other Innovative Dispute-Resolution Mechanisms

It is something of a truism that the organizational documents we prepare are only relied upon by our clients in times of disagreement and conflict. Seldom, during the pendency of a successful venture in which the participants view themselves as receiving their justly deserved benefits, will the documents be referenced. It is only when there is conflict that the documents are carefully reviewed in order to see who has what rights vis-à-vis either the venture or the other participants therein.

One common situation that must be addressed is deadlock. Whether the venture has two owners participating in management with equal rights, a board structure in which half of the directors are appointed by one body and half by another, or some other structure in which equally powerful groups may be formed, the possibility of deadlock needs to be recognized and a mechanism created by which, typically but not always short of dissolution, the dispute can be resolved.

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