Legal Question in Business Law in California

Re: Dissolution of Corporation

You can force a dissolution of partnership. Do you have a written partnership agreement. Normally, these provide for the procedure. If you have any questions, I would be happy to explain the litigation procedure should you not be able to resolve this on a friendly basis. We handle cases throughout California. Please call me at 714 363 0220.

Re: Dissolution of Corporation

The situation you describe is called 'deadlock,' and there is a substantial body of law on how deadlocks are broken.

The first questions a lawyer trying to assist you should ask would be along the following lines: (1) is there anything in the Articles or Bylaws that governs deadlocks? (2) is there any buy-sell agreement? (3) what are the objectives of the owners (i.e. do both want to sell, do both want to remain involved, or does one want to be bought out and the other want to buy out and the dispute is merely about the price)? (4) what is the value of the business as a going concern versus its liquidation or break-up value?

You might want to take a look at Corporations Code section 308 for one approach to deadlock (court appointment of a provisional director).

If the co-owners can at least agree that a deadlock exists and is undesirable, perhaps they can also agree to appoint an impartial person as a third director to do the same things a court appointee would do. An attorney such as myself could accept such a role with the understanding that the client was the corporation and not either shareholder individually.

Re: Dissolution of Corporation

This isn't overly simple question with a very complicated set of potential problems. I've read the reply of Mr. Whipple and agree with him in part. You first look to the lower corporate documents and shareholder agreement if there is one. I suspect there isn't one and I suspect that you use for documents which you never read at the outset. You can forced dissolution in the courts which is very expensive. The problem is what are you going to do with the corporate assets, namely the magazine. I'm going to assume not necessarily unwarrantedly at the only reason to both of you are continuing on with the business is the the magazine is successful in some degree, makes money and both of you wanna continue publishing the magazine. I would need to know what the impasse is as between you. Is it the dollar amount, who gets the magazine, who gets publishing rights, any other person go out and started new magazine, if so what restrictions if at all are built into that situation so that the new person doesn't get sued by his former "partner". These are just a few of many questions I would have before I could assess this situation. What I am going to use only is that you need an attorney who has practiced in the corporate/dissolution area. Hopefully, if you would get an attorney this might be an impetus to any negotiation applicable to a settlement of your disputes leading toward the transfer of the Corporation to either you or he. If you have any more questions I will be more than happy to discuss them with you. I am in Northern California and do not know where you are.