Legal Question in Business Law in Maryland

Partner refuses to wind up

General Partnership created in 2003 involving a breeding male livestock.

Requested to dissolve parntership November 01, 2005. Partner states they are prepared to pay us $x. We accept and create termination of co-partnership agreement out of pocket. Partner never signs agreement or pays. Requested action. Partner changes mind. We offer $x amount to buy her interest with deadline of February 02, 2006. Partner accepts our offer on February 01, 2006. We revised termination of co-partnership and bill of sale on February 02, 2006. All attempts to pay her or have the contract signed are futile (emailed documents, drove to house with documents and check, etc.). Received phone call that our partner has attempted to sell her interest to other parties without our knowledge on February 01, 2006.

What rights do we have to dissolve and wind up this partnership. Do we have to file through the court? This is impacting our business operations. According to our original contract, our partner gets possession of breeding male on March 2006. Do we honor the original partnership contract since they have not signed the co-partnership termination contract?


Asked on 2/05/06, 9:46 pm

1 Answer from Attorneys
Robert Sher Wagshal and Sher

Re: Partner refuses to wind up

You may have to file a court action seeking specific enforcement of your agreement (admittedly at this point, an oral one) to terminate the partnership and buy out your partner's interest. It sounds like she's "shopping" your offer to see if she can get a better deal with an outsider. If you have a well written partnership agreement, it should prohibit her from doing this in the first place. In your court action, you need to ask the court to enter a preliminary injunction prohibiting her from disposing of any partnership assets during the suit. Hopefully you have some written exchanges during the negotiations that will support your position that she accepted your latest offer. If the terms of the offer can be sufficiently established, a court can rule that a contract was formed and she is bound by it.

Under partnership law, any partner has the ability to terminate the partnership by declaring his/her intent to do so. Usually there are dissolution provisions in the agreement that dictate the terms of the dissolution, so these types of problems can be avoided.

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Answered on 2/06/06, 9:51 am


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