Legal Question in Business Law in California

Re: Equity at time of dissolution of a partnership

To protect your rights you need to file a dissolution of partnership action. You will be guarenteed an equitible share of partnership assets. Please call me directly ar (619) 222-3504.

Re: Equity at time of dissolution of a partnership

There are a number of ways to calculate damages in a contract case. One of these is where you ask to be awarded what we call the benefit of the bargain which is what I think you are referring to.

Re: Equity at time of dissolution of a partnership

The determination of damages for breach of contract follows a mixture of statutory and common-law (traditional or judge-made law) rules. The statutes themselves are a mixture of a few very broad, general laws and a lot of widely-scattered provisions buried in situation-specific statutes.

The most general statutes are found in the Civil Code, sections 3300-3321.

Looking for specific statutes governing particular situations is more difficult, but you have given me a couple of clues. It sounds as though you have a dissolving partnership that owns real estate as its primary asset. If so, you would want to look at partnership law and real-property law for possibly-applicable provisions.

See, for example, Code of Civil Procedure sections 872.010 to 874.240 regarding judicial partition of real estate. Section 872.730 says that a court may allow a partition proceeding to be used in a partnership-dissolution case. Then, note the other provisions regarding sale by referee, application of proceeds, etc.

Partnership statutes are found in the Corporations Code. Many of the provisions may affect the rights of the partners upon dissolution and wind-up; look particularly at sections 16401, 16405, 16501, 16601-16603, 16701 and 16801-16807. Other sections may apply.

In a very general sense, courts peg a winning plaintiff's recovery at somewhere between mere restitution and giving the full "benefit of the bargain" which means placing the winner in the same position he expected to be in, had the loser fully performed the contract. This could mean valuing the property at the time it would have been sold in the normal course of business, not at the time of the breach. Of course, "expenses avoided" would be deducted from the "benefits lost" to arrive at a net settlement.

There is no hard-and-fast rule for valuing sweat equity. Ideally, an agreement that involves sweat equity should specify how it is to be measured and valued. Partnership agreements tend to be written hastily and without professional assistance and things like this get overlooked.

You probably need an attorney for this.