Porn Empire Rocked by Flynt Brothers Lawsuit

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The higher the stakes, the less inclined family members become to risk upsetting the status quo. If they press for an arrangement more formal and explicit, they might get what they want. But they might not. "The majority of their net worth has been in the retained earnings of the business," says Deans. Whether the business is five years old or 25; whether revenues are four-figure or eight-, the emotional and political dynamics remain the same. If things seem to be working okay as is, nobody wants to rock the boat. Nobody wants to press for greater clarity.

"So," says Dean, "the timing is never good. There's too much personal risk."

It's not that family members don't see the downside to doing business in a loosey-goosey way, or that they don't see the potential pitfalls. It's that every family believes it will be the exception, Dean explains. "They believe the business will prevail because the family will prevail. But that's not usually the case." Too much can happen. "Spouses enter in, siblings are born, parents die. Succession issues arise. It gets very clouded, very complex; and usually it all gets resolved in court."

Hojnoski says Jimmy feels that he has been treated shabbily. "In a family business, when there's a breakup, there are always disputes over ownership issues and employment," he says. Often times, he says, it comes down to one person saying: 'Look, I don't care what's written on any piece of paper, but I've been here from the beginning, and I have an ownership interest. My value and my contributions have to be recognized. You can't just kick me out on the street.'"

Dean believes the destruction of the Flynt brothers' relationship prefigures the dissolution of the business and of the family fortune, which, he predicts, "will get ground down" in the courts and more legal wrangling. "The last chapter in a family business," says Dean, "too often is Chapter 11."

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