For any legal professional advising a corporate dragon, or serving in the legal office of a large firm, the sudden absence of distribution checks may pose a significant challenge. Let’s discuss an approach to resolving this uncomfortable situation.
Reliable distribution checks, whether they appear monthly or yearly, become a staple in any business’s financial framework. Yet, inexplicable pauses can raise numerous questions. Are we facing a downward business cycle, or is it an indicator of an underlying problem of a more malicious naure? Especially when the dependability of these checks has been unvarying. Recognizing the gravity of the situation, attaining clarity should be the first step before precipitous decisions are made.
But how should you proceed indeed?
No doubt, the abrupt cessation of checks can be unsettling. As legal practitioners, it’s not about jumping to conclusions but working out the facts and deciding the best course of action. Here is a guide on how Epstein Becker & Green recommend dealing with the sudden stoppage of distribution checks.
Whenever your distribution checks stop arriving, it’s vital to immediately seek out reasons for the halt. Begin by initiating a dialogue with the business responsible for the check distribution. A solution can potentially be found even before involving legal channels.
While immediate response is necessary, patience is also essential during the due-diligence process. It’s crucial to establish whether the check cessation is due inherent business struggles or clandestine machinations. This investigation could reveal that the current issue is due to temporary financial hitches that would be resolved, or it may open a Pandora’s box of legal complications.
In either instance, remember that as corporate law counselors, our role is to investigate, protect our client’s interests, and provide them with the best course of action. Let’s remember to keep calm, and carry on practicing due diligence.