The twenty-first century has seen the popularity of the family business diminish; losing its popularity to corporate conglomerates residing in modern buildings with shiny interactive desks. To a large extent, the Victorian values of the family business being passed down the generations is no longer the popular option.
In fact, according to a 2018 research into small and medium sized enterprises (SMEs), carried out by Legal & General, only 42% of British family-owned businesses have a plan for longevity.
Only around 30% are confident that the business will outlive the current generation and only 10% believe that it will be run by the third generation within the family.
48% of family-run businesses viewed the death or critical illness of the business owner as the main risk to their continued operations, with 57% anticipating that the business will close within a year of the death.
What happens then, when your small, family run grocery store becomes a worldwide market leader? This is precisely the case with German supermarket heavyweight Aldi.
Now teetering between its second and third generation of family members, the late wife (Cacilie Albrecht) of Theo Ambrecht, Aldi’s co-founder along with his brother, has attempted to block the younger generation in her family from gaining any further business control.
Within her Will, Cacilie accuses her late son’s (Berthold) wife, Babette Albrecht, and their five adult children of frittering away the hard-earned profits (£85 million) and living an extravagant lifestyle which is in direct opposition to Aldi’s money saving ethos.
Having split the company into a three-foundation structure in order to protect the company and keep the majority ownership within the family, Cacilie claimed the family spent more than £85 million from the section run by Berthold until his death in 2012. Her Will stated that this section of the family should be prohibited from taking part in important decision making.
Cacilie Ambrecht’s Will said:
“With this document I undertake to ensure the preservation of the philosophy of our family, which is to serve the consortium Aldi Nord and to foster this, at the same time as setting aside self-interests and practising a modest and abstemious way of life.
“Berthold himself said when he was alive that he had considerable doubts as to the suitability of his children to respect the life’s work of my husband who, with my support, built the consortium Aldi Nord, and to serve it with respect and with responsibility towards its thousands of employees.”
Whilst many businesses are struggling to look past the mortality of the original owner and operator, it would seem that preparing for the death of a person responsible for running a business is imperative to avoid creating unnecessary animosity and difficulties later on.
Have you dealt with similarly hostile probate cases involving a business? Have you noticed fewer people planning for the preservation of their business following their death?
