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Partnership and Shareholder Disputes

Partnership and Shareholder Disputes

Experienced Connecticut partnership attorneys

We have significant experience as counselors and litigators in “business divorce” cases. As the name suggests, these cases are disputes between partners in a small business, be it a partnership, limited liability company or corporation.

In our experience, many of these cases involve family businesses. And within this subset, internal strife often arises within the second generation of ownership, between siblings or sometimes cousins. When that is the case, emotions may run particularly high.

Here are some considerations in cases that involve partnership disputes.

Has there been a complete breach of trust?

Sometimes the stresses between business partners are temporary, perhaps arising from a change in life circumstances. When that is the case, often the business relationship can be renegotiated and maintained.

But in cases involving, for example, the embezzlement of company funds or the secret maintenance of a competing side business, the innocent co-owner needs to ask himself or herself the uncomfortable question, how can I be partners with a person I cannot trust? That question usually answers itself.

We are experienced in guiding clients through this process and exploring the appropriate options.

Is there a governing document that applies to the situation?

Many small businesses have an operating agreement, shareholder agreement, or similar document that spells out the rights and responsibilities of the owners. Those documents sometimes provide guidance on what measures may be taken against a problematic co-owner.

When we begin a case of this type, one of the first steps is to review the company documents to see what provisions may apply. Generally, Connecticut law is very deferential to the power of business owners to define their rights and remedies in a written agreement.

Is the partner a bad owner or just a bad employee?

Partnership disputes often arise from one partner’s poor performance on the job. When that is the case, the other owner(s) may be tempted to take measures that go beyond employee discipline and cross the line into wrongfully curtailing ownership rights. That may expose them and the company to liability.

We understand employment law and small-business law, and we are well qualified to guide business owners in complex cases where those areas of the law intersect.

O’Sullivan McCormack Jensen & Bliss handles matters in and around Hartford, Middletown, New Haven, and all other parts of Connecticut. We litigate cases in the state and federal trial courts and appellate courts. A number of our attorneys are also admitted and represent clients in Massachusetts courts.