Legal Question in Business Law in Georgia

partner suing partner for company debt

Partner A in a Georgia corporation provided the business and product idea, the sales and development work and the relationships and agreements with suppliers. Partner B provided most of the money to fund the company.

Partner A gave up his existing job to work full-time at XYZ Company. Partner B chose to continue to operate his existing business full-time.

2 years later, Partner B wanted to get out of the XYZ Company. The Partners held discussions on how to do this equitably, and continue to send proposals to each other for dissolving the Partnership without reaching an agreement.

Partner B then filed a complaint in State Court alleging that his investments were actually personal loans to Partner A.

There are no loan agreements between the 2 Partners. There are only personal checks, without notation, given to Partner A from Partner B. Partner B would also give cash to Partner A to pay for both product supplies and personal expenses. Partner A paid for business expenses with his own personal funds as well.

Question 1: How does Partner A answer this Complaint?


Asked on 11/14/02, 1:01 pm

1 Answer from Attorneys
Jeff Kent Kent & Merritt, P.A.

Re: partner suing partner for company debt

Not to sound flippant, but there is no real way to answer this question without a fuller understanding of the facts. For example, what did any partnership or shareholder agreement state? Was there any documentation whatsoever regarding the "loans" made? What other paperwork exists regarding the corporation, the partnership, the partners, etc.? Were there any oral agreements entered between the parties? What was the "loan" money intended to accomplish? What is the current status of the company?

Also, there are a number of questions that must be answered regarding the allegations and claims in the complaint. Is this an action on an unpaid note? Is is an action for judicial dissolution and an accounting for the business? Is it a claim for breach of contract or quantum meruit (value of services provided)?

My suggestion is that you hire an attorney to answer the complaint for you. Once a dispute has reached the level of litigation, it usually makes sense to have some legal assistance.

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Answered on 11/14/02, 1:27 pm


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