Legal Question in Business Law in California

Disslove our corparation. I have 50/50 ownership in a real estate business here in Los Angeles. In July my business partner and I decided to leave the real estate agency so that we could grow our own. My business partner happens to be the broker of our company. We have acquired 23 listings and have pending transactions. I noticed for the last two months, my partner has been hiding information regarding our transactions. I received an email this week stating that she wanted to dissolve our partnership and that we should go our seperate ways. I am stuck because I moved my real estate license under her brokeage which now gives her the authority to keep our listings and maybe my portion of the commissions. I replied to her email and stated that I was not willing to dissolve the business because she has everything in her possession that we both paid for, our E&O, Liability insurance, our bank accounts, and our business name. How do I proceed? I want to let our clients know what is going on because every listing we have , we acquired together. What can I do? I want to move on, but I don't want to lose my portion of the business until we close all of the transactions we got together. Please advise.


Asked on 10/14/10, 9:43 am

4 Answers from Attorneys
Terry A. Nelson Nelson & Lawless

The members of a partnership or shareholders in a corporation can wind down the business through reasonable negotiations, or it can be forced upon them by one of them seeking a court ordered 'partition' and distribution of assets. There is no magic wand here. You either work it out or someone sues. If serious about getting legal help in either form, feel free to contact me.

Read more
Answered on 10/19/10, 11:13 am
Rob Reed Law Office of Robert A. Reed

Assuming the partnership agreement spells out 50/50, I can't see how your soon-to-be-ex-partner can get out of that... winding down should be relatively simple if all parties follow the instructions in the partnership agreement. You should divide the 23 listings and pending transactions 50/50 upon completion and move on.

Good luck.

Read more
Answered on 10/19/10, 11:27 am
Joe Marman Law Office of Joseph Marman

Write a proposal to split the commissions, or you will hire a lawyer to sue her for violation of trust and fiduciary duties as well as breach of contract. You are entitled to be paid for your work under "quantum meruit".

Read more
Answered on 10/19/10, 12:17 pm
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

First, you need to be clear what the form of business organization is.....you mention a corporation initially, then go on to mention "partner" and "partnership." The laws governing dissolution, winding up, right to compensation (under a "quantum meruit" theory or per agreement), the nature of the fiduciary duties, etc. differ substantially, and advice given you as a 50% shareholder will be inappropriate if the business is a partnership, and vice-versa.

Law firms, as well as real-estate companies, frequently split up with a substantial book of unfinished business, goodwill, etc., so the legal principles for winding up the affairs of the dissolved firm and apportioning its assets are well developed and frequently applied.

I rather suspect this business is a corporation. If it is, the analysis begins with a review of the articles of incorporation, bylaws, and the shareholders' agreements - which hopefully will be detailed and in writing, but if not, perhaps can be reconstructed from other evidence. A lawyer would also want to review the minutes of directors' and shareholders' meetings, the text of all resolutions adopted, and the secretary's records of notices, stock certificates issued transferred and cancelled, and the like.

Please feel free to contact me directly for a no-obligation discussion of your situation.

Read more
Answered on 10/20/10, 10:15 am


Related Questions & Answers

More Business Law questions and answers in California