Considerations in Litigating Partnership Disputes

Considerations in Litigating Partnership DisputesMany business owners consider their main threat to be their competitors. However, for many companies, it is a dispute between the partners that leads to the business’s downfall. Partners can disagree over how to manage the company, cash flow shortages, growth strategies, and a variety of other matters. When the disagreement between partners begins to impact the operation of the business, it is vital that measures are implemented to safeguard the company and each partner’s equity interests.

Conferring with a business attorney does not mean that you must file a lawsuit. However, if your partner is embezzling or otherwise misappropriating company money or assets, you should take immediate and aggressive action. The quicker you take measures to stop the illegal behavior, the more likely you can save your company and reduce your overall legal expenses.

When a partnership disputes involves an imbalance of control, it often results in the partner that has more control over the entity locking out the other partner. The partner that is being shut out must consider obtaining an injunction from the court. The court can order the partner in control to stop taking certain actions as well as rule that the shut out partner must be allowed back in the door. This can significantly improve your leverage in negotiations.

Similar to other types of disputes, partners should try to resolve their differences through settlement rather than litigation. Going to court can be time-consuming, expensive and uncertain. Thus, as long as the company is stable, no partners are misappropriating company assets, and no partners are being “locked out,” settlement discussions should be the preferred strategy.

If you are considering filing a lawsuit against a partner, let us review your partnership agreement, bylaws and corporate agreements. We can help you understand your rates and develop a strategy for dealing with the dispute.

The Swenson Law Firm is located in Sacramento County and we proudly serve businesses of all sizes from all over the State of California. Contact us today to learn more about how we can assist you with matters such as trademarks, defending lawsuits, business formation, contract negotiations, hiring employees, and protecting your intellectual property. With our years of complex business trial and litigation experience, we are an effective, efficient and affordable choice in representing you at the bargaining table and in the courtroom.

Share this post to social media...