Legal Question in Business Law in Minnesota

partnership gone bad

Entered into a partnership with a buy in of 20,000.00 each.

We purchased equipment and everything we needed to get our business going. In a year and a half we had paid back each others loans by paying each of us quarterly to pay on our business loans. We recently found out the partner never put in his share--- he lied. After confronting him he said he would cash in his 401K money and put the 20,000 back into acct. He has never done this, plus has had business down payments made directly to his personal name--3 that we are aware of. He also borrowed 10,000 from the business and said he would pay that ba`ck and has never done that either. We told him we've had enough and he could buy the business at a fair value or we would liquidate. We also made the business and llc last Sept. and at that time opened a new checking acct. and told the partner that as soon as he put his money back into the business his name again would be on the checking acct. Now they got a lawyer and demand all copies of bank stmts. which they have up until the LLC acct. Pleas help me out in this matter or who I could talk to in Mn. He has been lying to us for such a long time. Thanks so much.


Asked on 3/29/06, 7:06 pm

1 Answer from Attorneys
Vincent W. King Vincent W. King, PA

Re: partnership gone bad

Partners owe each other fiduciary duties. If he misappropriated partnership funds, and failed to contribute the agreed-upon capital, you may have claims against him for breach of fiduciary duty and breach of contract.

Is he a member of the LLC, or did you exclude him from that? If he's not a member of the LLC, he probably has no right to receive the bank statements. If he is, then by law the LLC may be required to give him this info, or at least a summary.

I handle these kinds of disputes fairly regularly, so I may be able to assist. Unfortunately, they can be costly to litigate. Hopefully, you can convince him to agree to a buyout.

If you would like to speak further, feel free to give me a call or drop an e-mail.

In any event, good luck to you.

Standard disclaimer: The comments above are based on limited facts and should not be considered legal advice. We do not have an attorney-client relationship.

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Answered on 3/29/06, 8:12 pm


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