Partnership disputes can oftentimes result in litigation which can be partnership ending. Partnership disputes most often arise from a real or perceived breach of trust between the partners. The most common breaches of trust usually involve money, self-dealing by one of the partners, failing to account for money or assets, profiting individually from a partnership opportunity or theft. These disputes may also arise in the context of limited liability companies and closely held corporations.
Because of the disruptive nature of partnership disputes, it can be helpful to carefully draft a partnership agreement, stockholder agreement related to a corporation or operating agreement for a limited liability company. Having a well drafted partnership agreement, or other governing document, can help resolve disputes more swiftly and favorably. A partnership dispute may require an accounting of a partner’s activities or a forensic accountant to resolve.
Disputes at this level can be complex and may involve partners, shareholders, investors and other intra-organizational litigation including breach of partnerships agreement disputes; breach of fiduciary duty disputes; derivative lawsuits; director and officer liability claims; and joint venture disputes. Large amounts of money and the sustainability of a business venture may be on the line so trained guidance can be useful through the process of bringing a claim related to a partnership dispute.
The legal process provides important resources, remedies and protections for parties engaged in a partnership or other business dispute. It is helpful for partners, and others depending on the circumstances, to be familiar with what these protections are and the important legal options available to them when a dispute arises.