Cofounder conflict doesn’t start in a courtroom; it starts in the everyday tensions you’re too busy (or too hopeful) to deal with. When cofounder relationships break down, they don’t just bruise egos – they trigger cofounder disputes, destroy value and can drag your business into years of legal battles. In my work as a co‑founder conflict specialist, I see the same patterns play out long before the lawyers appear, which is why I want to show you what went wrong in three real cofounder break‑ups – and what could have gone differently if they’d chosen to work on the relationship first.
When coffee turns bitter – and what could have saved it
In Yonkers, two partners behind 4Jacks – a nitro cold brew coffee business with customers across cafes, restaurants, arenas and colleges – fell so far out of alignment that a judge ordered both corporations dissolved. One founder petitioned the court, saying dissension was so intense that management was impossible and that he no longer felt safe around his partner.
According to the filings, things didn’t fall apart because the product failed; they fell apart because the relationship did. Around spring 2023, one co‑owner was alleged to have become increasingly erratic and aggressive, drinking heavily, disappearing for long periods and even being physically removed from a food show. He was accused of taking nearly $83,000 of inventory from storage and using the company debit card for personal spending – blurring the line between “my money”, “your money” and “the company’s money”. Text messages reportedly included threats to harm his partner, to the point where the police became involved and an arrest was made after he admitted sending the messages.
By the time the judge got involved, the case was all about damage control. The court appointed a referee to value the business, dissolved the corporations with effect from April 2026, and permanently restrained one partner from contacting the other, his family, or any of the business’s customers and suppliers. Years of effort ended as a line item in a court order.
What could have happened instead
If this pair had chosen to work on the relationship early, before the police, before the petitions, the path could have looked radically different:
- A facilitated reset of expectations. An external cofounder specialist could have helped them revisit fundamental questions: What are our roles? What’s acceptable behaviour? How do we separate personal struggles (for example, alcohol, burnout) from business decisions in a way that’s honest but safe for both?
- Clear agreements on money and boundaries. Coaching combined with legal input can turn vague assumptions into concrete practices: what can go on the business card, how loans are documented, what counts as misuse and what happens when it’s spotted. That clarity protects both people and the company.
- Support for the human being, not just the shareholder. If one founder is spiralling – with heavy drinking, erratic behaviour and emotional outbursts – there’s usually a story underneath: stress, identity, health. A neutral coach can help the other founder say “I’m worried about you and the business” without it turning into pure accusation – and can signpost to appropriate personal support where needed.
- A structured separation if necessary. Sometimes the healthiest outcome is a planned “uncoupling”: one founder exits, or steps back, or sells their stake. With facilitation and a roadmap, that can be handled via negotiation rather than confiscated inventory, police reports and lifetime restraining orders.
The difference isn’t naïve positivity; it’s having someone in the room whose only job is to protect the relationship and the business from the worst of your own reactions.
When legal‑tech leaders fall out – and what a reset could look like
At the other end of the spectrum is Dye & Durham, a listed legal‑tech company in a long‑running dispute with its former CEO, Matt Proud. The company has gone to the Ontario Superior Court to enforce a Cooperation Agreement, arguing that Mr Proud and his vehicle, Plantro, have repudiated it. Under that agreement, he had accepted standstill restrictions linked to a strategic review, including limits on how he could act while a Strategic Committee evaluated options and potential proposals.
Dye & Durham has announced that it is commencing an action to seek a declaration that the Cooperation Agreement remains fully valid and to obtain injunctive relief to stop any breaches. It has already obtained a court order, on the consent of Mr Proud and Plantro, enjoining them from breaching the standstill terms while the strategic review continues. Around this, you have an activist backdrop, a former CEO feeling strong ownership of the company’s future, and a board trying to run a “robust sales process” while managing a publicly hostile relationship with the person who used to lead the business.
From the outside, this is a tangle of standstill clauses, strategic committees and rights plans. Underneath, it’s a textbook relationship rupture: “We built this together. Now you’re saying you know what’s best for it, and I disagree.”
What could have happened instead
With the right kind of external perspective, this story could have looked very different:
- A structured founder–board dialogue before activism boiled over. A specialist in founder dynamics can sit between a former CEO and a board and ask the questions that legal letters never will: What does “fair influence” look like now? What level of involvement does he need to feel respected? What level of distance does the board need to fulfil its duties?
- Reframing the strategic review as a shared project. Instead of a zero‑sum battle (“your proposal versus our process”), a facilitated process could have aligned on criteria for any deal, the non‑negotiables, and how different proposals – including one backed by the former CEO – would be evaluated. You still need lawyers and independent advisors, but the emotional contract gets reset.
- Designing a dignified role transition. A former CEO’s identity and sense of legacy are bound up in the company. Coaching can help untangle “I need control” from “I need to know my contribution is recognised”, opening up options such as formal advisory roles, defined communication channels or agreed boundaries on public commentary.
- Containing conflict before it becomes public theatre. Once every move is in a press release or regulatory filing, everyone gets more defensive. A neutral third party gives both sides a safer space to vent, recalibrate and explore options – before positions harden and litigation becomes inevitable.
For a team at this level, the question isn’t “Could coaching replace contracts?” – of course not. It’s “Why did we wait until we were asking a judge to enforce our agreements, instead of getting help to renegotiate our relationship while we still had choices?”
When law firms can’t model the behaviour they sell
Then there’s the Michigan law firm battle – a painful reminder that even professional conflict‑handlers aren’t immune when partnership issues are left to fester. In southwest Michigan, Kotz Sangster is suing rival firm Butzel Long and 16 former employees (eight lawyers and eight support staff), claiming more than $11 million in profit lost over five years on dozens of cases that moved with the team.
Kotz Sangster alleges that Butzel Long actively recruited the team that built its presence in West Michigan, effectively shutting down its regional operations after what it describes as a “raid”. Both firms had been expanding across West and Southwest Michigan, and the dispute now centres on who has rights to the business, offices and future profit streams associated with those lawyers and clients. Butzel Long, for its part, maintains this all happened in the normal course of business – that lawyers move firms all the time, and clients ultimately decide who represents them.
A ‘nasty legal tussle’ will now play out in a Berrien County courtroom, with no trial date yet set and two heavyweight firms pouring resources, attention and goodwill into attacking each other instead of serving clients.
What could have happened instead
Imagine, instead of a multi‑million‑dollar court fight, some earlier, harder conversations:
- Honest dialogue about ambition and fit. Before secretly plotting an exit, a partner group could sit down with external facilitation to explore: Do we still want the same firm? Are there structural reasons some of us feel we have to leave to do our best work? Sometimes conflict is really about strategy misalignment, which can be addressed openly rather than covertly.
- Clear, revisited agreements about client relationships and team moves. Law firms often have partnership agreements, but they’re not always emotionally “owned” by everyone. A neutral expert can help partners pressure‑test: If a team left, what would feel genuinely fair? That might lead to agreed formulas, notice periods or collaborative transition protocols – rather than surprise departures and emergency injunctions.
- Designing graceful exits, not raids. People can and will move on. The choice is whether it’s handled as a planned succession, with thought given to clients, juniors and reputations, or as a covert operation followed by years of bad blood. With facilitation, a group can negotiate terms that protect both sides’ dignity and economics.
- Using their own skills on themselves – with outside help. Lawyers are trained to argue and to win, not to be vulnerable with colleagues. An external coach or facilitator can help them switch modes: from “litigator” to “partner”, from “adversarial” to “diagnostic”. That’s extremely hard to do alone from inside the system.
If even law firm partners can’t always navigate this without blowing up the relationship, there’s nothing “weak” or “unusual” about you needing help with your own cofounder dynamics. It’s human.
The common thread: optimism at the start, avoidable pain at the end
What connects a coffee startup, a legal‑tech scale‑up and two Detroit‑based law firms?
- They all started with high optimism and clear upside.
- They all hit predictable stressors: growth, financial pressure, strategic change, human vulnerabilities.
- None of them built a shared, practiced way to work through deep misalignment
- They all ended up in courtrooms, with judges and lawyers making decisions about relationships that were once held together by trust alone.
None of these teams were uniquely “bad” or “broken”. They were normal, ambitious humans trying to build something together – without the relationship infrastructure to handle what success and strain would throw at them.
That’s the point I want you to take away: if you’re finding your cofounder relationship hard, you’re not the exception.
How to change course before the writ arrives
If you’re reading this with a knot in your stomach because you recognise some of these dynamics, here are some practical steps you can take now. They’re not magic tricks; they’re the kind of structured, supported moves that keep you out of the case studies.
1. Name what’s happening
Cofounder conflict thrives in vagueness. Try this:
- Sit down (away from the day‑to‑day) and each answer, separately, “What’s really worrying me about us right now?”
- Swap answers with the explicit intention to understand, not to rebut.
- Notice where your stories differ – about money, effort, direction, or behaviour.
If you can’t have that conversation without it exploding, that’s not a failure – it’s a signal you need a third party in the room.
2. Separate the human from the patterns
Ask yourselves:
- What’s a situational issue (burnout, family stress, illness, a specific project)?
- What’s a repeating pattern (avoidance, unilateral decisions, simmering resentment)?
An external coach can help you see the distinction. Situational issues often need support and temporary adjustments. Patterns need new agreements and new habits.
3. Create (or refresh) your “relationship operating system”
Most founder teams have operating systems for product, marketing, finance. Very few have one for their relationship.
With the right facilitation, you can co‑create:
- Clear decision rights: Who decides what, and how do we break deadlocks?
- Money rules: What’s salary, what’s dividend, what’s reimbursable, what’s not?
- Behavioural commitments: What’s okay and not okay in how we speak to each other, especially under pressure?
- Check‑ins: Regular founder reviews where you talk about you, not just the numbers.
Doing this with an external cofounder specialist means someone is holding the process – you don’t have to play referee and player at the same time.
4. Explore your options before you feel trapped
If one of you secretly wants out, or wants a different role, it won’t stay secret forever. The earlier you name it, the more options you have:
- Role redesign (for example, one moves from CEO to product, or from exec to chair).
- Re‑balancing equity in line with current contributions and responsibilities.
- Planned exits, with timelines, valuations and transition plans you both sign up to.
When founders try to do this alone, it’s easy to fall into “winner takes all”. A neutral expert can widen the option space and keep both of you focused on what you value most – business continuity, personal wellbeing, or a clean break.
You’re not alone – and you don’t have to go where they went
If your gut is telling you that your cofounder relationship is heading in the wrong direction – more tension, more silence, more side‑conversations – you don’t need to wait until it looks like a New York coffee dissolution, a legal‑tech boardroom battle or a multi‑million‑dollar law firm breakup.
Change for the better is possible. I see it all the time when founders are willing to:
- Admit that the relationship matters as much as the strategy.
- Bring in external perspective before the damage is irreversible.
- Do the uncomfortable work of hearing each other, updating agreements and, where necessary, consciously reshaping or ending the partnership.
If you’re concerned you might be drifting towards the kind of stories you’ve just read, don’t leave it until your first serious conversation is with a judge.
Reach out. Get an external perspective, coaching, facilitation and clear signposting from someone who lives and breathes cofounder dynamics. Together, we can identify what’s really going on and build a roadmap out of the damage – while you still have the thing you set out to build in the first place.