Suicide is Painless?
Tony Packo's Cafe in Toledo, Ohio, became famous in the US and Canada when Klinger, the cross-dressing Corporal in M*A*S*H, played by Toledo native Jamie Farr, mentioned Packo’s hot dogs in several episodes. Now the Packo family have made their own headlines crossing lawsuits over power, money, insults and hurt feelings.
I started to add this story to the “Family Feuds in the News” column (below) but then realized I’ve had enough similar cases so that I could use it this month in lieu of a fictionalized anecdote based on my own clients. In this case, the names are real and I know no more about it than what I read in the Cincinnati Enquirer.
The article (from the Associated Press) reports that founder Anthony Packo left his café, three other restaurants and packaged food businesses equally to Tony Jr. and his sister, Nancy Packo Horvath. Last June, Tony sent a memo to employees and suppliers saying that Nancy is not an executive or an employee of the company.
Nancy filed suit last month in Lucas County Court accusing her brother and fellow shareholder of libel, breach of duty and trying to force her out of the business. Arguing that she’s a director and corporate secretary of Tony Packo's Inc., Nancy seeks $500,000 in punitive damages and demands that Mr. Packo retract his June memo.
Now her brother and his son, Anthony Packo III, filed a countersuit seeking to dissolve the company. They claim it’s impossible to carry on the business “because the owners are in a deadlock.”
Imagine where all this leaves Nancy’s son, Robin Horvath, a company vice president.
Anthonys II and III ask the court to appoint a receiver to take charge of the company’s assets while its affairs are wound up and the corporation is dissolved.
Our question, ladies and gentlemen of the jury: At what point in the escalation of a feud does the Lose/Lose option (the business equivalent of suicide bombing) become inevitable?
copyright reserved 2006, Kaye Family Business Associates, Inc.
posted by Ken Kaye at 8:04 PM
6 Comments:
Enjoyed that this was based on an article in the news, and I remember the MASH hot dog episode.
Did you see that this was from 2002. Any idea how it all worked out?
If anyone knows how the litigation came out, please post. I did hear that Nancy, the founder's daughter, recently passed away. Her son, Robin Horvath, is listed as still involved in the business with his uncle and cousin, Anthony Jr. and Anthony III.
I found this in the Toledo Blade, April 24, 2003:
"The families eventually settled their differences in October, agreeing to add an impartial third person to the company's board and to split off the food company into a separate subsidiary.
"Mrs. Horvath described the ordeal as 'painful and uncomfortable' and afterward apologized to customers and employees alike.
"Tony, Jr., said the problem emerged because no formal succession plan had been put in place. 'It was the kind of decisions that should have been made 40 years earlier. I don't blame myself, and I don't blame her. I'm sorry it happened. But now ... we have a whole new corporation. And I have my nephew and son to carry it on,' he said.
"Soon after the dispute was settled, Mrs. Horvath was diagnosed with cancer."
Ken,
An implicit assumption underpinning the field of family business consulting is that our clients harbor the dual goals of fairly resolving business issues while maintaining some degree of a functioning family relationship. In that context, I want to respond specifically to your question
“At what point in the escalation of a feud does the Lose/Lose option (the business equivalent of suicide bombing) become inevitable?”
by suggesting that the commencement of litigation represented the point of no return for the Packo/Horvath family.
Despite over 25 years of consulting with family businesses, I have yet to mediate an instance of family business litigation where these dual goals are met. While the business issues ultimately have gotten resolved in the mediation, the family relationships are irrevocably damaged by the litigation process.
My dissatisfaction and frustration with these experiences motivated me to write an article addressed to attorneys, who are the usual source of such engagements (see http://www2.mnbar.org/benchandbar/2004/apr04/essay.htm). My appeal to them was to exhaust all efforts at mediation before commencing litigation rather than assuming that a lawsuit will bring family members to the bargaining table with a more positive attitude towards compromise and resolution. The rationale for my strong feelings is stated there as follows:
“Commencing litigation before initiating mediation creates enormous obstacles for both the parties and their attorneys.
“For the parties: Once accusations and counter-accusations have been made by family members in the context of litigation, they cannot be taken back and are never forgotten. The insult, hurt feelings, and sense of betrayal cannot be erased by the explanation that "my attorney said I had to do it" in order to maintain the action. The normally positive "family factor," which is the single most important ingredient in finding a respectful, negotiated win/win outcome in family business disputes, becomes a huge barrier to rational problem solving.
“For the attorneys: For attorneys representing clients in dispute resolution, the most challenging task is to serve effectively and simultaneously (a) as the client's loyal and committed advocate, and (b) as a "reality tester," helping the client maintain realistic goals and expectations. The emotional charge of family business litigation seriously exacerbates the normal challenge of striking this often-delicate balance.
”Thus, the unintended consequence of deferring mediation until after commencing litigation is to make the task of seeking a mediated solution incredibly more difficult.”
The Packo/Horvath litigation will inevitably resolve the business issues. But the commencement of the litigation was, in effect, the election of the lose/lose option insofar as the family relationships for this and future generations are concerned.
Steve Swartz
Steve wrote his comment on the same day Jim Keeling was contributing the news about the Packo/Horvath reconciliation. I certainly agree with what Steve (a self-described "recovering lawyer") says, and it's supported by the bulk of our experience.
It would be interesting to know how Nancy's cancer diagnosis, and perhaps some particular strengths of the Packo family, as well as her son, Robin, and other factors helped to make this story, apparently, an exceptional case of resilience in family bonds.
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