Legal Question in Business Law in Maryland

;artnership gone sour big $$$ involved not sure what to do

Joined partner 6 yrs. ago in moving co. venture. He was working out of his house, I moved from Seattle. Company is now worth about $700k with close to 3 million annual rev. Our agreement was never finalized in writing. I recently was forced out (I could have stayed but would have looked weak in the eyes of the loyal employees)of the company. Those issues involve mostly power and business ethics. Not sure what to do first. The company owes me a lot of past unreimbursed expenses, wages/car allowances not paid during tight times. I feel I am owed my share of the equity in the company. I agreed to pay many other employees more than myself thinking all would even out as the company grew. I have other issues I would like to discuss also, but am not really sure just what my rights are and how/when/where to proceed. Thank you!


Asked on 10/20/04, 1:37 am

1 Answer from Attorneys
Alan Albin Alan S. Albin, Attorney at Law

Re: ;artnership gone sour big $$$ involved not sure what to do

If a significant monetary claim is involved, then there is no doubt that you need to actually retain an attorney immediately to protect your interests. Contracts and partnership agreements are very fact-specific.

In Maryland, a partnership does not have to be in writing. However, proving what you are entitled to in terms of the share of the business, may be very difficult without a well-drafted partnership agreement. It is all a question of what you are able to prove. An attorney can help you with this.

For example, on the one hand, you claim to be a "partner." If you are, then you would be claiming a share of the equity or partnership profits (presumably). Yet, your question also suggests that you want to claim for unpaid "wages" and "expenses". A claim for "wages" against the business would suggest that you were regarded as an employee of the business, not an owner/partner of it.

Certainly, you should be able to document claims for unpaid wages, unreimbursed expenses, and the like. You should also be able to document payments you made to employees.

Further, there should be six years of tax returns filed personally by you, and/or by the partnership. The tax returns should reflect evidence of your income and expenses from the partnership. Did you file tax returns? Did the partnership?

How well-documented was this business, and your participation in it? The better the documentation, the stronger your claims will be.

You need to retain an attorney to discuss the specifics.

I strongly recommend that you consult with an attorney immediately so that you can explore your legal rights, obligations, and options. If you wish to discuss retaining my services, contact me at:

[email protected]

(973)-605-8995

(*Licensed in New Jersey, Maryland, and Dist. of Columbia)

[Disclaimer: The above comments are not intended as nor should they be relied upon as "legal advice", which can only be obtained by personal consultation with a retained attorney; at which time the specific facts and circumstances of your case can be thoroughly evaluated. This reply is provided for general informational and educational purposes only, and does not create an attorney-client relationship with the responding attorney.]

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Answered on 10/20/04, 7:42 am


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