Attorney for Partnership Dispute in New York City

When you go into business with someone, you expect the relationship to work. But partnerships break down all the time. When that happens, the legal issues can be serious, and they can put everything you have built at risk. If you are in a partnership dispute in New York City, you need an attorney who understands both business law and the courts that handle these cases.

What is a partnership dispute

A partnership dispute happens when business partners disagree in a way that affects how the business runs or what each partner is owed. These disagreements can start small, but they often grow into major legal battles. They typically involve disagreements over how the business is being run, allegations of partner misconduct, or a breach of a partner's obligations to the partnership. When a dispute reaches a certain point, it cannot be resolved without a lawyer.

Breach of fiduciary duty

One of the most serious legal issues in a partnership dispute is a breach of fiduciary duty. Partners are fiduciaries of one another, meaning that the members of a partnership owe each other a duty of loyalty, honesty, and good faith. This means each partner must act in the best interest of the partnership, not just their own.

As fiduciaries, partners must refrain from self-dealing, neglect of their responsibilities, waste, and misuse of partnership funds and property, all of which may give rise to a claim for breach of fiduciary duty. If you believe your partner has violated this duty, an attorney can help you determine whether you have a legal claim and what damages you may be able to recover.

Breach of the partnership agreement

Most partnerships have a written agreement that sets out the rules for how the business will be run. When one partner breaks those rules, it is a breach of the partnership agreement. A party suing for breach may be awarded direct and indirect damages, injunctions, restitution, rescission, legal fees, and other appropriate remedies as provided under the law.

If your partnership does not have a written agreement, New York's partnership laws will fill in the gaps. Either way, an attorney can review what rules apply and what your options are when the other side has broken them.

Misappropriation of funds and assets

One of the most damaging things a partner can do is take money or assets that belong to the partnership. Partners are prohibited by law from misappropriating company funds, assets, or partnership opportunities. In addition, partners cannot compete with the partnership or have an adverse interest.

If a partner has been taking money from the business, using partnership assets for personal gain, or steering business opportunities to themselves, you need legal help right away. This kind of conduct can drain a business quickly, and the sooner you act, the more likely you are to recover what was lost.

Disputes over profits and losses

Disagreements over money are one of the most common causes of partnership disputes. Partners may disagree about how profits should be divided, whether certain expenses are legitimate, or whether the financial records accurately reflect what the business has earned. These disputes require a careful review of the partnership agreement, the financial records, and the conduct of each partner. An attorney can help you get a full accounting of what the business has made and what each partner is owed.

Management and decision-making conflicts

Partnerships run into trouble when partners cannot agree on how to run the business. These conflicts can involve financial disagreements, management issues, breaches of the partnership agreement, and decisions regarding the dissolution of the partnership.

When partners are deadlocked, it can bring the business to a halt. An attorney can help you understand your rights when you and your partner cannot agree, whether that means negotiating a resolution, going to court for a ruling, or pursuing other legal remedies.

Freezing out a partner

One of the most aggressive things a partner can do is try to cut the other partner out of the business entirely. This can include locking someone out of the office, taking over the business accounts, or refusing to share financial information. You must move immediately to secure your business and the equity interests that you have worked so long and hard to create. You also must act quickly, as the other partner may try to freeze you out.

If this is happening to you, you may need emergency legal relief. An attorney can go to court to protect your rights and prevent the other side from taking actions that could permanently damage your interest in the business.

Buying out a partner

Sometimes the best solution to a partnership dispute is for one partner to buy out the other. Under the partnership agreement, there should be a provision about when a buyout can occur and how much interest can be offered to the partner. If there is no such provision, the partners will need to negotiate, and that negotiation can easily turn into a legal dispute of its own.

A buyout involves much more than agreeing on a price. It requires a formal agreement that addresses the transfer of the departing partner's interest, releases from liability, and any ongoing obligations the departing partner may have. An attorney is essential to make sure the buyout is done right and that neither side is left exposed.

Dissolving the partnership

When a partnership cannot continue, dissolution may be the only option. If all partners agree to dissolve the partnership, it is considered a voluntary dissolution. Where only some of the partners want dissolution, it is involuntary, and the partner requesting dissolution must get a court order to dissolve the partnership and divide the assets and debts of the business.

Conflicts over winding up the business can occur, with partners disputing how the process should be handled and who is responsible for various tasks. Additionally, disputes related to asset division and debt settlement can arise. An attorney can guide you through this process and make sure your interests are protected as the business is wound down.

Mediation, arbitration, and litigation

Not every partnership dispute ends up in a courtroom. A partnership contract may provide for the submission of disputes among partners to neutral third parties for mediation or binding arbitration. Mediators help to facilitate the negotiations and try to bring the sides to an agreement but are not the arbiters of the dispute. With arbitration, the parties present their claims, defenses, and arguments to the neutral third party who makes a legally binding award that can be enforced by the courts.

If the partnership agreement requires arbitration or mediation, you must follow that process before you can sue in court. If there is no such requirement, you may have the option to go directly to litigation. Either way, having an attorney represent you from the very beginning gives you the best chance of getting a fair outcome.

Why you need a New York City attorney for a partnership dispute

New York City has its own business courts, its own commercial laws, and its own way of handling these disputes. The judges who handle partnership cases in New York understand the complexity of business relationships, and the legal standards they apply are specific to New York law. Working with an attorney who practices in New York City means you have someone who knows these courts, knows the applicable law, and knows how to protect your rights.

Whether your partner has stolen from the business, violated the partnership agreement, or is trying to push you out, you should not try to handle the situation on your own. The other side will almost certainly have legal help, and you should too.

Contact the Law Offices of Albert Goodwin

If you are involved in a partnership dispute in New York City, the Law Offices of Albert Goodwin can help. Attorney Albert Goodwin has experience handling business disputes, protecting clients' rights, and resolving conflicts through negotiation, arbitration, and litigation. He will review your situation, explain your options, and fight for your interests.

Call us for a consultation. You can contact us by phone at 212-233-1233 or by email at [email protected].