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Legal Remedies for Partnership Disputes

May 17, 2023 | Corporate Planning

Even when business partners have the best intentions, partnership disputes are not uncommon. Unfortunately, these conflicts can cause disruption to business operations and harm your bottom line. Whether a partner breached their fiduciary duty, misappropriated assets, or simply wishes to leave the partnership, it’s crucial to understand the legal remedies for partnership disputes.                     

Types of Partnership Disputes 

Partnership disputes can arise due to many reasons. For example, there may be conflicts concerning financial resources, the authority of the partners, or workload distribution. Conflicts can also arise because of disagreements over how profits and debts should be divided, a partner’s misconduct, or because partners have different visions for the company.         

Other common reasons for partnership disputes can include:

  • Breach of partnership agreements
  • Breach of fiduciary duty
  • Financial mismanagement
  • Misappropriation of funds
  • Disputes regarding management
  • Fraud or misrepresentation
  • Conflicts about ownership rights

Resolving a partnership dispute can be costly and time-consuming. However, a good partnership agreement can help resolve disputes before they arise. Not only can it specify the duties and obligations of partners, but it can also dictate how any conflicts should be resolved.   

Remedies for Partnership Disputes 

Partnership disputes can be resolved in one of two ways: in court or out of court. While alternative dispute resolution methods such as mediation, arbitration, and negotiation can sometimes be helpful to settle disputes outside the courtroom, these methods only work when parties compromise. When cases are contentious, as they often are between disputing business partners, litigation may be the only viable option.           

When partnership disputes are litigated, these remedies may be available, depending upon the facts:  

  • Judicial dissolution — If a partnership agreement is in place, it should specify the procedures that should be followed in the event of dissolution. However, if there is no agreement and all partners do not consent to dissolve the partnership, it may be necessary to file a legal action for judicial dissolution. In New York, a judge may order a partnership to be dissolved where it is not reasonably possible to carry on a business partnership due to a partner’s conduct. Judicial dissolution can also be ordered when the partnership can only be carried on at a loss or other circumstances render a dissolution to be equitable.                
  • Injunctive relief — When a business partner is engaging in conduct that could harm the business, and a monetary award would not be a proper remedy, injunctive relief may be the best recourse. Injunctive relief may be sought where a non-compete agreement has been violated, a business partner is misusing company assets, or trade secrets were stolen. To show that you may receive injunctive relief in your case, you must show a probability of success on the merits, a danger of irreparable injury if the injunction is not granted, and that equity tips in your favor.
  • Monetary damages — Often, an award of monetary damages is the best option to remediate the loss suffered by a company because of a partner’s misconduct. An award of monetary damages helps cover the economic losses with the dispute. The damages available will depend upon the dispute, and can include both compensatory and liquidated damages.

If dissolution is the only way the partnership dispute can be resolved, it is essential to understand that the proper wind-down procedures must be followed. This process includes satisfying debts of the company, dealing with any outstanding contracts, and settling all business affairs.

Contact a Knowledgeable New York Partnership Disputes Lawyer

If you are experiencing a partnership dispute, it’s critical to have legal counsel on your side to protect your interests and safeguard your assets. Brinen & Associates provides skillful representation for partnership dispute litigation and a wide variety of business matters. Call (212) 330-8151 or send us a message to learn more about how we can help.


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I formerly worked as a satellite employee from my home state of New Jersey. I ended my employment with my former employer in 2016. In 2018, I was sued by my former employer for $1.1 million in Illinois State Court. I was referred to Brinen & Associates, LLC by a friend who is a client of the firm. Brinen & Associates, LLC came highly recommended. I contacted Joshua Brinen and then had a consultation at his office with his colleague Mark White. Together, Messrs. Brinen and White explained my options...

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