Our Clients’ Best Interests Foremost In Mind
Working together to build a business should mutually benefit all parties involved. However, disputes and litigation often arise when one party disagrees with the other about success or another key aspect of the business’s operation. If you find yourself in this position, a Chicago partnership litigation lawyer from our team is here to help.
At King & Jones, our corporate litigation legal team provides case evaluations, so you can learn more about our team, and we can discuss your options. We represent plaintiffs and defendants in partnership litigation and help business owners avoid trials when possible. We can answer your questions and discuss your desired outcome. Contact us today.Free Case Evaluation
King & Jones Has Decades Of Experience Handling Cases Like Yours
When we represent a business owner, our attorneys from King & Jones fight to get the best possible result. While we want to keep costs down and work efficiently, we also want to build the strongest case possible to help our clients get the outcomes they deserve. When you work with us, your goals become our goals.
Our team provides top-level customer service in addition to providing legal representation and guidance. Many of our clients return when they need additional legal services, and others leave glowing reviews for our team. We have more than 40 years of experience as trial lawyers going up against large corporations, insurance companies, and more. We know how to protect your best interests.
We pride ourselves on ensuring our clients fully understand their cases. We can answer any questions that arise and provide advice and information about legal options, pros and cons, benefits and risks, and more. We develop a strong plan for approaching the case, present this to the client, and move forward as they wish. Your involvement in preparing your case is crucial.
Understanding Business Partnerships In Chicago
Business partnerships, and the rules necessary to create them, vary from state to state. In Chicago, state law says that when two or more people go into business together, they have a partnership. This is true even without any type of contract or written agreement. In the past, this might have been called a “handshake agreement.” If you are currently in a disagreement or face partnership litigation, you probably already understand many of the problems with informal partnerships.
We encourage all business partners to have comprehensive, written agreements to provide guidance when disputes arise or prevent them from occurring.
We Represent Clients In These Partnerships
While state laws allow partnerships without formal contracts, there are several different kinds of partnerships that could occur. The details are important when it comes to issues that could arise later. This is because the rights and responsibilities vary based on the partnership type.
- General partnerships: Most “handshake” partnerships are general partnerships. Each person owns the same portion of the business, they have equal rights and responsibilities, and they have equal shares of the debts and/or profits. This commonly occurs when two people with equal interests go into business together.
- Limited partnerships: Limited partnerships have a primary partner and one or more with limited liability. This means one partner manages the business, and the others are investors. They have a stake in the company’s success, but do not participate in the business’s day-to-day operations.
- Limited liability partnerships: In these partnerships, each partner has limited liability based on their investment in the company. Some partners could have more liability and possible profitability than others. Common examples include veterinarians’ offices with several vets, dentists and doctor’s practices, accounting firms, and law firms.
We help business owners understand their partnership agreements and determine their next steps in handling disputes. The sooner you contact us, the sooner we can start advocating for you.
Our Partnership Litigation Lawyers Manage These Disputes
There are several reasons why partners feud. Most come down to money. One partner believes they know what is best for the company, and others disagree. A disagreement quickly turns heated, and no one looks for a compromise. Clients often call us because they are considering a lawsuit, or their partner already began legal proceedings.
When two or more people go into business together, their relationship as co-owners of the company creates a fiduciary duty to one another. The details depend on the type of partnership and other factors. However, this obligation is at the heart of many partnership disputes. Each partner must act in the best interests of the business and their fellow partners.
When one partner acts in a way that financially harms the company, the other partner or partners can pursue actions for breach of fiduciary duty.
Fiduciary duty breaches include:
- Misappropriation of funds
- Making poor financial decisions without consulting the other partners
- Siphoning business funds for personal use
- Harming the business’s reputation and future sales potential
Some partnership disputes do not directly deal with the partners’ fiduciary duties. Instead, they disagree about the next step in the life of the partnership. Most partnerships do not remain the same forever. Something happens to change the agreement, and these changes don’t always happen smoothly.
Some partnership disagreements we help clients navigate include:
- The transfer or sale of a portion of the company
- Buying the other partner out
- Partnership dissolution
- Business succession
- Adding another partner to the business
- Changing the company’s direction, goal, or significant operating procedures
- Breach of contract related to the partnership agreement
Outside influences also lead to business disputes.
Consider these potential issues partners face:
- One partner passes away.
- A partner gets divorced, and the interest in the business is community property.
- There is a significant change in one partner’s financial situation.
- One partner or the business is the victim of fraud.
- One partner faces legal trouble.
- There is an outside offer to purchase the business.
- There are disagreements on routine or major decisions about the business.
Our team understands how difficult it is to agree on everything when working together to build a business. However, disagreements do not have to elevate to litigation. We provide dispute resolution guidance and work to help partners avoid trial when possible.
How King & Jones Approaches Chicago Partnership Disputes And Litigation
People who decide to go into business together are rarely strangers. They are coworkers, family members, friends, or others who already have an established relationship. This often increases the stress when a disagreement or dispute arises.
There is more to lose than money or control of the company; many of our clients want to preserve their relationships when possible. This is one reason why we often work to settle disagreements before lawsuits become necessary.
We Hope To Resolve Your Case Without The Hassle Of Going To Court
When litigation becomes unavoidable, it causes partners to become adversarial, altering how they work together for years to come. In addition, it takes time and money better spent in other ways. Neither partner wants to waste money on litigating a disagreement when that money could bolster their bottom line or help their business grow.
Our team believes in including strong language about dispute resolution in your partnership agreements. There are many options for settling a disagreement before considering litigation.
Options could include:
- Alternative dispute resolution (ADR), which could include negotiation, mediation, or arbitration
- Assigning each partner specific types of decisions
- Agreeing to a buy-out or sell-out to new owners when you cannot agree
- Finding a unique strategy that works for your partnership
When possible, we help partners follow their business plans. Even if there is no mention of ADR in their contract or no written plan, negotiation, mediation, and arbitration are solid options for many partners. Still, formal legal intervention is sometimes necessary. When this occurs, our team handles all aspects of the lawsuit. We file these suits on behalf of plaintiffs and defend against them. If your partner already began litigation, let us advocate for you.
Possible Outcomes Of Chicago Partnership Litigation
The possible outcome of your Chicago partnership dispute depends greatly on the case’s facts and your goals. As noted, when we represent a client, their goals become our goals. We work closely with you to understand what you stand to lose and ensure you do not. We know a negative outcome could include financial losses, loss of ownership or control of a company you care about, or other hardships.
We are here not only to manage your legal case and represent you to the judge or jury but to protect your rights, investment, and financial stability. As a part of representing your best interests, we ask what you hope to accomplish. We believe keeping your aim in focus is important. How we approach a case could affect your future. For example, it is often a good idea to avoid litigation if you hope to work closely with your partner again.
A positive outcome in your case could come from:
- A trial. Litigation could resolve your partnership dispute. Here, a judge would rule on what dispute you’re experiencing.
- Mediation. At mediation, both parties sit down with a neutral third party who hopes to guide the conversation toward a mutual agreement. This could serve as a great avenue if you hope to preserve your partnership.
- Arbitration. Mediation happens outside of court. However, unlike a mediation, a third party will make a binding arrangement.
When Dissolving The Partnership Is In Your Best Interest
Sometimes, partnership dissolution is the best possible outcome in a case, and that often creates additional disputes. When this occurs, we walk our clients through the process.
If you decide to dissolve your partnership, you must:
- Fulfill your final obligations to customers
- Pay off any debts
- Divide any remaining assets
- Divide proceeds fairly
- Notify your creditors of the dissolution
- Terminate any outstanding contracts
- Determine whether the business will continue, and, if so, in what capacity
When this occurs, one partner often wants to continue in the same industry or with the current customer base. We can explain your options and how to navigate this if you or a partner hope to keep certain tools or resources, the business name, or inventory to lay a foundation for future work.
We Hope To Mitigate The Stress That Comes With A Partnership Dispute
Unfortunately, partnership litigation is often very emotional. Partnerships require working closely and managing many issues as they arise. Partners often share many vulnerabilities and rely on one another for emotional support. When things go wrong, anger, frustration, and sadness are common.
This can lead to problems, including:
- A desire for revenge more than fairness
- An adversarial attitude that causes additional disagreements
- Lack of trust between partners and an unhealthy relationship in the future
If this sounds somewhat like a divorce, you are correct. While many disputes end with a negotiated agreement, the parties resolve their differences, and the partnership continues, this is not always the case.
Our team can’t undo the tension between you and your business partner. However, by managing each step of the legal process, we hope to make this challenging time easier to bear.
Talk To A Team Member About Chicago Partnership Litigation Today
At King & Jones, our knowledgeable team members provide consultations for those considering partnership litigation or facing disputes with business partners. These cases have very specific concerns and possible outcomes that we want to discuss before moving forward with representing your interests. Our Chicago business litigation lawyers will discuss your concerns, options, and next steps today.
Contact us now by calling (312) 372-4142. With one just call, you can learn why those with business disputes rely on our team for guidance and support.