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Partnership Disputes & Business Divorces

The attorneys at Cantrell Zwetsch have a track record of successfully resolving partnership disputes and business divorces. When litigation is necessary, we’ve obtained significant recoveries for our clients at trial.

Partnership disputes can be extremely difficult for both the individuals involved and their business interests. Many times, partnerships are formed between people that know each other very well and have worked together for some time. As with other relationships, however, business partnerships can sour or objectives conflict. When a significant partnership dispute occurs, obtaining experienced legal representation is prudent. The business litigation attorneys at Cantrell Zwetsch understands that partnership disputes often involve more than just dollars and cents. We apply pragmatic approaches designed to meet our clients’ objectives.

WHY HIRE CANTRELL ZWETSCH

The attorneys at Cantrell Zwetsch successfully prosecute and defend breach of partnership agreement claims, statutory fiduciary duty claims, statutory demands to review company records, and actions for the withdrawal of a partner or the dissolution of a partnership. Our clients include a wide range of industries, including medical, accounting, legal, insurance, real estate, construction, and hospitality. Our skillset, combined with relationships with respected accountants and valuation experts, enable us to effectively represent our clients.

Litigation is not always the best approach to resolve a dispute. That is particularly true with partnership disputes and business divorces. When appropriate, we work with clients to discretely resolve partnership disputes outside of the courtroom—whether through formal mediation or arbitration, or through direct negotiations.

If you are considering Cantrell Zwetsch, we encourage you to review our attorneys. Each of our attorneys have impressive credentials, including graduating from top law schools, graduating at or near the top of their law class, and/or clerkships with federal judges. Most important, they are trial attorneys with substantial business litigation experience.

WHAT WE HANDLE

The business litigation lawyers at Cantrell Zwetsch have handled virtually every type of partnership dispute. Common examples of partnerships disputes that arise include: 

  • Breaches of a partnership agreement;
  • Beaches of an operating agreement, shareholder agreement, by-laws, employment agreement, or compensation agreement;
  • Fiduciary duty violations;
  • Fraud and misrepresentation;
  • Misappropriation of company assets and corporate theft;
  • Embezzlement;
  • Management and owner conflicts;
  • Breaches of restrictive covenants, such as a non-compete, non-solicit, or non-disclosure agreement;
  • Misappropriation of trade secrets;
  • Irreconcilable disagreements on critical company decisions, such as the direction of a company or allocation of assets; 
  • Expulsion of a partner;
  • Disagreements on division of assets and valuations; and
  • Conflicts on dissolution, winding down, and accounting. 

If you are involved in a partnership dispute or business divorce, contact us. We will provide a no-cost consultation. Our phone number is 1-800-698-6650.

FREQUENTLY ASKED QUESTIONS

Generally, yes. Attorney fees are often recoverable in partnership disputes. A partnership agreement may allow for the recovery of attorney fees for the prevailing party. Where there is no partnership agreement or the agreement is silent on fees, many states allow for the recovery of attorney fees under certain circumstances. To determine whether attorney fees are recoverable, speak with a partnership lawyer at Cantrell Zwetsch.
No. Generally, a partnership exists when two or more people associate to carry on as co-owners of a business for profit. There is no requirement for the individuals to actively intend to form a partnership. They must only intend to engage in business as co-owners. Thus, a partnership can be created when people may not expect it, such as when there is no written or verbal agreement to form a partnership. Courts often find a partnership exists if there is a sharing of profits and losses in a business venture.
In general, partners owe each other the limited fiduciary duties of loyalty and care. These fiduciary duties apply regardless of whether there is a written partnership agreement. Examples of duty of loyalty obligations include to (i) hold in trust and funds/property held by the partnership, (ii) avoid self-dealing with the partnership to the detriment of the partnership, (iii) avoid direct competition with the partnership, and (iv) refrain from acting on behalf of adverse parties. The general duty of care requires partners to carry out any partnership conduct without gross negligence or extreme recklessness.

If a partner breaches his or her fiduciary duties, the other partner or partners may be able to obtain an injunction or recover compensatory damages. In certain situations, a court may even award punitive damages to punish a partner for particularly egregious conduct.
An accounting is a legal cause of action to effectively determine who owes who what. An accounting typically involves the hiring of a financial expert, such as a forensic accountant, to investigate the finances of the partnership to determine the relative compensation rights of the partners. Through an accounting, a court can also adjust the accounts of the parties or force the return of funds to address conduct or inequities. Attorney fees and costs, including the cost of experts, may be payable from the partnership’s assets.
Partners may be motivated to resolve disputes outside of a courtroom for a multitude of reasons. For example, the partners may want to keep a dispute or details of a business divorce confidential, to obtain a quick resolution, or to reach a non-conventional agreement that could not be obtained in court.

There are two formal alternatives to court: arbitration and mediation. Unlike court, arbitration provides a level of confidentiality. Arbitration can also often be completed quicker and at less cost than a court proceeding, but this is not always true. Mediation is another alternative that is confidential. Unlike arbitration, however, mediation does not involve a final decision maker: the parties must try to come to a resolution on their own at mediation. Finally, partners can attempt to resolve disputes through informal negotiations. The business litigation lawyers at Cantrell Zwetsch have substantial experience in representing individuals and companies in partnership disputes, including in court, arbitration, mediation, and negotiations.
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