Imagine co-owning a business with a business partner. If your partner made unreasonable demands but you knew the company couldn’t exist without using his license, would you comply, or would you get your own license?

In this story, one man is in this situation, and he complies at first, but that’s not nearly the end of the drama.

Let’s hear all about it from the perspective of the son-in-law of one of their most important employees.

Use your own license!

My MIL is a fantastic lady and beyond the fact that I was lucky enough to marry her lovely daughter, I also feel pretty lucky to have married into their family.

MIL is very sweet, kind and generous.

She’s also extremely smart and be hard-nosed, stubborn, and crafty especially if she sees someone else subjected to an injustice.

Here’s some background about where MIL worked.

MIL has worked for years running the back office parts of a construction contractor (being vague here) down southern part of the good ol’ US of A.

The way the business was set up, there were two partners. One partner held the license and provided some occasional funding, and the other partner did the actual day-to-day work of running crews to make money.

This was not ideal having to split his hard work between two partners whose contributions were not equal, but the working partner was, according to himself, “not a school guy” and getting a contractor’s license takes a lot of studying. In fact I believe he had dropped out of high school and didn’t have a GED at that point.

But times changed.

At the time of this story, this arrangement had been going on for many, many years and over that period of time the business had grown from the three of them (the partners and my MIL) with a few subcontractors into having a reasonable number of employees.

At the same time, the licensed partner turned from being an equal partner and wanting to grow the business to demanding an increasingly large share of the profits and providing less and less support in the tough times.

This came to a head during the crash of 2008 when the licensed partner sat MIL and the other owner down to tell them that he’d decided that he wanted to extract the money he thought he was owed for his half of the business due to the uncertain economic times and then charge the business a fee going forward to essentially rent his license from him.

His reasoning was that times were so bad that there was no way that the business would succeed and he wanted to get his money before there was none left.

The partner sounds pretty selfish.

Now anyone who’s been in or owned a small business knows that money isn’t just sitting around, but rather it gets reinvested or goes to pay off debts, and they both tell the licensed owner as much and say that paying out that much money, especially in 2008, will hurt the business, may even make them lay off workers during the downturn, and might ruin the business.

The licensed partner knows this and doesn’t care.

The licensed owner tells them, “this is what’s happening and if you don’t like it you can use your own license!”

He had them pretty backed into a corner here, so they acquiesce and agree to a solution that they’ll pay him out in a reasonable amount of time and that beyond this payout he’s no longer entitled to any of the company’s assets beyond the agreed upon fee to use his license.

It was tough, but the company survived.

Well, through some belt-tightening and some good financial relationships they were able to find or borrow the money to pay him out and still run the business without having to let anyone go.

This was done primarily by the remaining owner and my MIL taking some significant salary cuts with months where the owner wasn’t making anything at all.

In fact over the course of the next few years with the money saved by not having to pay a deadbeat partner out from the profits, they pay off the debts incurred due to his payout, grow the business significantly, are able to restore their previous salaries, and can give their employees some much-needed raises.

While the deadbeat is no longer involved with the business operations as per their agreement, it’s pretty obvious to anyone driving by at that time that the business didn’t implode and was in fact thriving just by virtue of the new work trucks and the increase in people going in and out.

The partner comes back with another demand.

So who do you suppose comes walking in one day a few years later looking for a handout?

Supposedly-silent partner is no longer happy with the terms of the deal from years before. He knows the company is doing well, and he wants his “due” or the working owner can, again, “use his own license!”

They tell him to pound sand.

But deadbeat isn’t one to back down on his threats as it’s become one of his few remaining sources of income, so he marches himself down to the county clerk to file the paperwork to dissolve his stake in the company and, of course, remove his license.

The owner thought he was getting revenge, but there was an important piece of information he was missing.

Once everything’s filed he smiles and says to the clerk (who my MIL knows very well and who relayed this conversation back to her):

“I wonder what license that idiot is gonna use now!”

The clerk simply replies, “well, I suppose he’ll probably just use his own”.

Here’s what the partner didn’t know.

Unknown to deadbeat was that in addition to rebuilding and then running a thriving business made worse by the crash and paying off deadbeat, my MIL and the (now only) owner had spent a number of months after the original conversation studying nights and weekends to first get the owner’s GED and then get his contractor’s license.

They didn’t immediately switch the business over to the owner’s new license according to my MIL because, along with not wanting to give deadbeat a heads up, “it was gonna be more fun for him to learn about it this way”.

I love it! They played that situation perfectly. They clearly knew the partner would try to threaten them again, so they were prepared.

Let’s see how Reddit reacted to this story.

This person blames the parents.

If only the clerk had taken a picture!

Exactly!

Everyone loved the story.

He never saw that coming!

If you liked that story, check out this post about a group of employees who got together and why working from home was a good financial decision.