Business partnerships usually start with a sense of optimism. Unfortunately, not all partnerships are meant to be. When one partner leaves before the other is ready to shut it down, it can lead to more anger and frustration. This type of split can lead the abandoned partner to contemplate filing a lawsuit.
The answer will depend on a variety of factors. Top of the list is the nature of the partnership or operating agreement. Generally, initial contracts allow partners to leave, even if it triggers the dissolution of the business. Of course, they are still subject to all applicable state laws.
Conditions for abandonment
However, there may be circumstances where the abandoned partner has a case. Valid reasons could include:
- The departing partner breached their agreement
- The departure intentionally or recklessly caused damage to the business for their own gain
- The partner violated their fiduciary duties.
- Their departure involved such criminal acts as fraud, theft or embezzlement.
The disputes will often arise over the damage to the business or not fulfilling the duration and conditions of their agreement.
Does litigation make sense?
The circumstances of each dispute are different and will depend on initial agreements. Litigation can ultimately provide damages related to the other partner’s harmful behavior. This can be a benefit to the abandoned partner and can also benefit others involved in the case, such as employees. However, judges are often inclined to allow owners and employees to pursue other employment options, mainly if the written agreements are too demanding or unrealistic in scope. Before filing a lawsuit, it is best to discuss the abandonment and the business contract details with attorneys who handle business disputes and litigation. They can help determine the option for moving forward.