An uncle/nephew dispute like no other

Photo by Sean Gallup/Getty Images News / Getty Images
Photo by Sean Gallup/Getty Images News / Getty Images

Here’s a good example of when an uncle and nephew fall out over the control of their family business. It involves one of Europe’s biggest meat companies, the German-based Tönnies Group, which, among others things, makes the country’s favourite food sausages. Tönnies has revenues of more than €5 billion a year - so the stakes are pretty high.

The North Rhine-Westphalia-based company was set up in 1971 and was run by two brothers - Bernd and Clemens Tönnies. But Bernd, who originally set the business up, died in 1994, leaving his shares to his son Robert. Robert and his uncle Clemens appeared to get on alright running the business together for the next ten-plus years, but a dispute over who had overall control of the company appeared to be simmering in the background for years. Both uncle and nephew own 50% each of the privately-controlled business.

Anyway, the ongoing tension between the two came to a head in 2011 and both have since reverted to the courts to try to resolve the situation. According to reports, one of the issues is the level of outside management - Robert wants more outsiders to take key roles in the business, whereas Clemens wants the management structure to stay pretty much how it is. Clemens also wanted the continuation of double voting rights, that benefited his side of the family even though each party owned the same amount of economic shares in the business. 

Both men have employed top German lawyers - Robert is using the Stuttgart lawyer Mark Binz, arguably the country’s most renowned resolver of family business-based disputes - and Clemens, according to reports, is using another heavyweight German lawyer called Michael Hoffmann-Becking.

The dispute looked to be resolved a few months ago when it was reported in the German press that the two parties would stop their litigation against each other and agree a deal on ownership and management of Tönnies. However, that appeared to be wishful thinking, because tensions have risen to the surface again, according to reports in the German media. Those reports say the two parties have yet to sign an agreement, despite verbally agreeing to end the dispute a few months back.

Rivalry between the two is further complicated by the fact that Clemens also owns another meat-producing company called Zur-Mühlen-Group. He is also chairman of one of Germany’s top football clubs, Schalke 04.