Rocco Cozza • April 20, 2026

the 5 d's of business - a must read for business owners

business lawyers

If you’ve ever started a business with someone you trust, I would bet this situation hits close to home. Both you and your partner are excited about the business, your ideas and timing feel perfectly aligned, and progress is accelerating at high speeds.


The last thing you want to do is be the one who hits the brakes and suggest talking about contingency plans if things go wrong. Other than being labelled as pessimistic, you might as well be jinxing the momentum, right?


I’d imagine it’s similar to a healthcare worker looking around during their shift and saying, “Ya know, we haven’t been that busy tonight! No ‘crazies’ have come in!” That’s a death wish.


But I’m here to tell you that you need to rethink and reframe that mindset. It is incredibly common for clients to come to us who have had incredible businesses, just for it all to fall apart because the business owners didn’t have a ‘what if’ playbook.


Let’s use a hypothetical.

Two friends start a company. They split ownership 50/50 because it feels fair. They pick a name, launch a site, land a few early customers. Energy remains high and they’re in that sweet spot where everything is scrappy but promising.


Fast-forward a year. The business is real now: payroll, vendors, bigger clients asking bigger questions. The stakes are higher and so are the rewards.

Then life does what it does to one of the owners. Maybe it’s a health issue. Maybe a messy divorce. Maybe a parent gets sick. Maybe one of them quietly wants out but doesn’t know how to say it. Maybe one of them just stops showing up the same way they used to.


It doesn’t even need to be as dramatic as those listed above. It can just be a one-degree shift in vision for the company. And now the two founders are staring at each other across the same business, each thinking some version of: Wait, what do we do now? Who decides? Who pays? What’s fair? What’s even allowed?


That moment is why we talk about the “5 D’s” of business. They may not solve all the world’s problems, but they are five predictable and common ways partnerships get tested.


So what do the 5 D’s actually mean?

1) Death

If one owner dies, who owns their share the next day? This is where a lot of partnerships get blindsided. The deceased’s ownership doesn’t just vanish. It usually passes to an estate, meaning a spouse, parent, or adult child may suddenly have a financial interest in the business (and sometimes even decision rights, depending on documents).

Some questions to answer now:

  • Should the business (or the remaining owner) buy the shares back?
  • How is the price set?
  • How is it paid (cash, installments, insurance)?


2) Disability

What if an owner is still an owner, but can’t do the work anymore? Disability might mean a medical event, but it can also mean someone is simply unable to perform their role for an extended period. Here, we typically see this pressure point being one of resentment. One person is carrying the business, but the ownership split as though nothing has changed.

Some questions to answer now:

  • What counts as “disabled” (and for how long)?
  • What changes first: role, pay, distributions, decision authority?
  • Is there a plan to buy out the ownership if the disability continues?


3) Divorce

How do we keep someone’s spouse from becoming an accidental stakeholder? Even if a spouse never becomes an operating partner, divorce can create a cash squeeze, force valuation conversations, and introduce outside pressure at the worst time.

Some questions to answer now:

  • Can ownership be transferred to a spouse? (Usually you want the answer to be “no.”)
  • If a divorce creates a claim on value, how do we handle buyouts or payouts without crippling the business?
  • Do we require a spouse consent or similar protection up front?


4) Disagreement

What happens when we’re stuck, and we both think we’re right? This is the one founders don’t plan for because it feels insulting to bring up in the honeymoon phase. But disagreements are normal, especially when the business grows and the decisions get heavier. The “real” question isn’t whether you’ll disagree. It’s: How do we break ties without breaking the company?

Some questions to answer now:

  • What decisions require both owners?
  • What decisions can one owner make within guardrails?
  • If we hit a deadlock, what’s the tie-breaker (advisor, rotating “chair,” or a structured “disagree and commit” rule with a review date)?


5) Distress

What if one owner hits financial trouble, or the business hits trouble, and it drags everyone else into it? Distress can mean business distress (cash flow, debt, covenant issues). It can also mean personal financial distress (bankruptcy, creditor problems) that creates risk around ownership. The goal isn’t to punish someone for having a bad season. The goal is to prevent the business from becoming collateral damage.

Some questions to answer now:

  • What happens if an owner’s shares become exposed to creditors?
  • Can the company/other owner buy back the interest to keep it “in the family”?
  • If the business is distressed, who has authority to make urgent decisions?


Final Thoughts

Addressing these situations now are a simple way to keep life from hijacking a good business. You’ll be thanking yourself later by deciding the rules while everyone’s calm, writing them down, and revisiting them like you would insurance coverage or passwords.

If you do nothing else, schedule one meeting this month and walk through each scenario with the same question: “If this happened next week, what would we want to be true?” Answer that now, and you’ll buy yourself something every owner wants and very few ever plan for…peace of mind.  If you need help navigating these scenarios, schedule a no-cost, no-obligation consultation.  Click here to call now.



Cozza Law Group Business Law Blog

How Restrictive Covenants And Non-Compete Agreements Are Enforced

By Rocco Cozza • August 22, 2026
The enforceability of restrictive covenants and non-compete agreements depends on various factors, including how and when the employee/contractor initially signed the document. A company or employer may find it easier to enforce these agreements if they work with business law attorneys in Pittsburgh during the initial drafting and signing processes. If a company can steer clear of common mistakes from the very beginning, it can protect its competitiveness and avoid issues caused by former employees/contractors. Pennsylvania Only Enforces Non-Compete Agreements That Meet Five Requirements While Pennsylvania does not have a clear statute governing non-compete agreements, past cases have established a three-part test for their enforceability. First, a non-compete agreement must clearly define a timeframe in order to be enforceable. In other words, it must have an expiry date. You cannot stop an employee or contractor from competing indefinitely. Case law also suggests that non-compete agreements with the strongest enforceability are only valid for a few years (and not decades). A Pennsylvania court is also likely to reject a non-compete agreement with an ill-defined scope. In other words, the contract must describe exactly what the employee or contractor is prohibited from doing. The scope must also be reasonable, meaning you can only prevent employees from joining clear competitors. If a company is only distantly related to your industry or field, a non-compete probably can’t prevent your former employee from joining that organization. Scope also encompasses the type of company information that the employee uses to compete in the future. You cannot stop a former employee from using their own inherent skills and knowledge to set up a competing business. The only way you can legitimately curb competition from a former employee is by limiting the way they use your company’s “confidential information.” You might be surprised to learn that your former employees have every right to use company information that you consider to be confidential. As long as that information is publicly available, your employees can use it freely. This includes price lists, your suppliers' contact information, and general business practices well-known in your industry. One example of “confidential information” in this context is a list of your customers, complete with their email addresses and telephone numbers. Although this information might be publicly available, a normal person would not be able to recreate the finished list without spending years building a business (as you have). Intellectual property is another example of protected, confidential business information. If you have gone through the trouble of obtaining a patent or a copyright, your employee has no right to steal this information and use it to set up a competing business. The same logic applies to “trade secrets,” which may include confidential formulas or recipes. That said, it is important to remember that these violations are governed by intellectual property law, and not necessarily non-compete agreements. Non-compete agreements in Pennsylvania must also clearly define their geographical “reach.” You can only prevent an employee from competing with you in your geographical area, such as the City of Pittsburgh or Allegheny County. Even if your employee signs a non-compete agreement, they could theoretically travel to another state or country before starting a competing business. Finally, companies in Pennsylvania generally need to offer employees or contractors something in return for signing non-compete agreements. If the penalties for violating the agreement represent the “stick,” then the reward represents the “carrot.” In business law, this reward is called “consideration.” A common type of consideration is a job offer. With the job offer on the table, there is a clear reward for signing the non-compete agreement. On the other hand, the potential employee could always walk away from the job offer without excessive penalties. Another type of consideration is career advancement. This might be a raise or a promotion. An employee may decide to sign a non-compete agreement in order to access these career benefits. If they reject the offer, they would presumably keep their current position in the company without any other consequences. Pennsylvania courts may deem unenforceable a non-compete agreement that lacks these promised rewards. In the eyes of the court, an employee faces a difficult situation if they could lose their job by not signing a non-compete agreement. As with all contracts, duress or undue influence can make non-compete agreements unenforceable. Penalties Help Enforce Valid Non-Compete Agreements Assuming a non-compete agreement is valid, what exactly stops an employee from violating it? Without effective penalties, a non-compete agreement is useless. You can enforce your non-compete agreements with “injunctions.” These are court orders that require your former employee or contractor to immediately stop working for the competing business. If they have set up their own business, a court order could force them to shut down operations. Penalties may also include damages. The court can order the competing employee or contractor to pay compensation for your losses. For example, an employee might have stolen all of your customers by offering the same services for a lower price. In this situation, you could recover all of the profit you would have earned if those customers had remained loyal. Negotiation Is Often the First Step of Enforcement While taking your former employee or contractor to court can lead to positive results, most parties attempt to resolve their disputes through negotiation first. Indeed, mandatory “arbitration clauses” are often built into non-compete agreements. A business law attorney can represent your best interests during these negotiations, ensuring positive outcomes without an expensive, time-consuming trial. Can a Business Law Attorney in Pittsburgh Help Me? A b usiness law attorney in Pittsburgh may be able to help if you are serious about making your restrictive covenants and non-compete agreements as enforceable as possible. Legal assistance with drafting and negotiating these agreements from the outset may improve their enforceability if a dispute arises later. That said, lawyers can also help resolve disputes over restrictive covenants signed long in the past. To explore this topic further, consider contacting Cozza Law Group, PLLC at (412) 790-2789. You can also find us online .

Understanding Shareholder Disputes and How They are Resolved

By Rocco Cozza • June 8, 2026
Shareholders set corporations apart from other types of businesses, and they often help companies achieve considerable levels of success. On the other hand, executives and directors often forget that each shareholder is a part owner. With so many owners, it is easy to see how complex shareholder disputes can become. The first step is to understand why and how these shareholder disputes arise. The second step is to resolve the dispute, potentially with guidance from an experienced business litigation attorney in Pennsylvania . Shareholder Disputes Arise Because of Shareholder Rights To understand shareholder disputes, you first have to understand shareholder rights. Common shareholders have voting privileges, which means they can control the trajectory of the company. Although some shareholders never bother to vote, others take these rights very seriously. The more shares you have, the more power you have to control major decisions. Shareholders also have the right to profit from the success of a company. Because of this, they have a financial incentive to oversee the company’s trajectory. If the company leadership starts to make mistakes or intentionally act against the interests of the shareholders, disputes naturally arise. Finally, shareholders rely on the accuracy of records and corporate books to make their investment decisions. For example, they might choose to sell or hold their stocks depending on the published earnings of a company. If these records are inaccurate or intentionally altered, the shareholders may make poor investment choices as a result. Now that you understand shareholder rights, it is easy to see how shareholder disputes might arise. Shareholders might sue if they feel that the company is making major decisions without bothering to hold votes. They might also sue if they feel that the leadership is acting against their best interests. Another type of lawsuit might involve shareholders suing a company for inflating their earnings and releasing inaccurate data. Shareholder Disputes Often Begin With Alternative Dispute Resolution Most lawsuits, including shareholder disputes, go through a process of alternative dispute resolution (ADR) before parties actually proceed to the courtroom. ADR may involve mediation or arbitration, and it takes the form of private negotiations. The shareholders may select legal counsel to negotiate on their behalf, as it would be impractical for thousands of individuals to sit at the negotiation table. In other situations, an individual shareholder might file a lawsuit on their own. In this situation, that individual might be present at the negotiation table alongside their legal counsel. ADR often serves everyone’s best interests, helping to resolve disputes without resorting to expensive and time-consuming litigation. Public trials are not good for business, and shareholders might be just as willing to resolve these issues in private as the executive suite. Arbitration clauses are often “built in” to the corporate bylaws or charter. In other words, parties may have no choice but to attempt mediation/arbitration before proceeding to a trial. That said, parties are under no obligation to successfully complete the arbitration process. One party could refuse to negotiate, and a trial would subsequently become inevitable. What are Some Common Types of Shareholder Disputes? Shareholder disputes may take various forms. All of these lawsuits fall into four main categories, however. An individual shareholder might file a direct lawsuit against the company. Another type of lawsuit might be a “derivative suit,” which involves the shareholders suing on behalf of the corporation. This type of lawsuit often targets a specific bad actor within the company, such as a self-dealing CEO. Class actions are also relatively common. In this type of lawsuit, numerous shareholders join forces to file a single lawsuit against the corporation, often under federal securities law. Finally, a dispute might take the form of an “appraisal proceeding,” which focuses on whether the company has received a fair valuation before a merger. How Does Pennsylvania Law Affect Shareholder Disputes? Pennsylvania law is quite deferential to the board of directors, granting it considerable control and authority. A common source of conflict in a corporation is the contrast between the “democracy” of the shareholders and the authority of the board of directors. Pennsylvania tilts the scales in favor of the board. First, Pennsylvania requires a shareholder to make a written demand to the board before they can file a derivative lawsuit. The board can then appoint a “Special Litigation Committee” to investigate the shareholders' claims and demands. If the committee determines that a lawsuit would go against the best interests of the company, courts in Pennsylvania may not allow it to continue. It is difficult to circumvent these requirements for derivative lawsuits in the Keystone State because of strict limits on direct lawsuits. Finally, Pennsylvania has no rule that states a board must place its shareholders’ interests above those of other relevant parties. These parties might include employees, customers, suppliers, and even the greater community or environment. This is not the same in other jurisdictions, making the Keystone State a “board-friendly” state that repels takeovers. In fact, it is considered by many to be the most management-friendly state in the country and one of the toughest places for shareholder plaintiffs to sue. While this is good news for boards facing shareholder lawsuits, the Keystone State’s protections are not infinite. Effective legal representation is necessary to take advantage of the jurisdiction’s legal safeguards. On the other hand, plaintiff shareholders can still achieve success in Pennsylvania, but they may need to rely on innovative, experienced business litigation lawyers in the face of strong regulatory barriers. Contact Cozza Law Group PLLC to Learn More About Shareholder Disputes While online research can provide plenty of insights into shareholder disputes, each case is slightly different. Given the varied nature of shareholder disputes, it may help to discuss your specific circumstances with a business litigation attorney in Pennsylvania . Cozza Law Group PLLC serves enterprises of all sizes, offering a fractional counsel model that provides legal guidance that fits your company’s unique needs. Continue this dialogue by contacting us at 412-453-8673 or visiting us online .