Legal Question in Business Law in California

General Partnership Dissolution

A general partnership was entered into to sell a ''Kit'' to small businesses. Both partners equally funded, one partner was assigned to do all work for business while other partner continued in another business. The business ran out of money and needed to be dissolved. The assets remaining were possibly the Kits, and the liabilities were small.

Problem: I want to go forward with one document that originated from Kit. (The document has been totally rewritten.) But my ex-partner has not negotiated winding down.

I am developing a strategic partnership with another firm and planning to meet with angels and VC's. I have been advised I must get a release from ex-partner so he will not sue me if my new business becomes successful (based on this being extension of old partnership). Is this true and are there any cases regarding this? Where can I find a release form?


Asked on 12/08/00, 10:07 pm

2 Answers from Attorneys
Ken Koury Kenneth P. Koury, Esq.

Re: General Partnership Dissolution

Any lawyer can write you a release form. it should not cost more than $50-100

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Answered on 12/09/00, 11:28 pm
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Re: General Partnership Dissolution

It would be preferable to wind up the partnership rather than only obtain a release. If there was a written partnership agreement, review the termination provisions.

If a release is all you can get, it should be as broad as reasonably possible. Your potential liability is not just for copyright (as you may be thinking, given your mention of the re-writing of the material), but for usurpation of a business opportunity. As long as you are in a partnership, you owe the other partners a duty of loyalty which includes not taking deals it could do for your own account. Winding up the partnership AND getting a release that is specific to the Kit information and ideas is your best overall protection.

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Answered on 12/10/00, 8:54 pm


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