Experienced In Handling Partnership Disputes
A partnership is a legal entity used by many different lines of business, including professionals such as engineers, attorneys, accountants and doctors, and also investors, research and development ventures, and more.
At its core, partnerships are based upon trust, which is reinforced by the law of fiduciary duty. Partners owe each other fiduciary duties, including the duties of loyalty, candor and utmost good faith and fair dealing. Partnership disputes can occur whenever one partner breaches these fiduciary duties or engages in self-dealing by engaging in actions such as the following:
- Misappropriating assets belonging to the partnership
- Diverting assets belonging to the partnership
- Misappropriating or usurping “business opportunities” belonging to the partnership
- Concealing information or putting their own self-interest above that of the other partners or the partnership
The attorneys at Dunham LLP have extensive experience in partnership disputes and have successfully represented plaintiffs and defendants in high-stakes partnership litigation.
Common Questions About Partnership Disputes In Texas
Partnership disputes move quickly, and the questions that come with them tend to feel urgent. Here are straightforward answers to the ones we hear most often.
What happens if our business does not have a formal written partnership agreement?
Texas law still recognizes the partnership and fills in the gaps using default rules under the Texas Business Organizations Code. Those defaults may not reflect what the partners actually had in mind when they went into business together, which is exactly why disputes without a written agreement tend to get complicated fast. The sooner you understand where you stand legally, the better positioned you are to protect your interests.
What legal remedies are available if my business partner is misappropriating funds or usurping opportunities?
A partner who diverts funds or takes business opportunities for personal gain has breached their fiduciary duty, and Texas courts take that seriously. Available remedies can include damages, a full accounting of partnership assets and disgorgement of profits the breaching partner wrongfully pocketed. Courts can also issue injunctive relief to stop ongoing harm while the case is being resolved.
How long do I have to file a partnership dispute lawsuit in Texas?
It depends on the type of claim. Breach of fiduciary duty claims in Texas generally fall under a four-year limitations period, while other claims tied to fraud or misrepresentation may run on a different timeline depending on when the wrongdoing came to light. Missing a deadline can permanently eliminate a claim, which is why reaching out to an attorney as soon as a dispute surfaces is important.
Can a partnership dispute be resolved without going to trial?
Most are. Negotiated settlements, mediation and arbitration are all realistic options depending on the circumstances and what the partnership agreement says about dispute resolution. We pursue the most efficient path to a fair resolution, but we prepare every case as though it will go to trial because that preparation is what gives our clients real leverage at the negotiating table.
Can a partner be forced out of the business or can the partnership be dissolved entirely?
Both are possible under Texas law. A partner can be dissociated from the partnership based on a material breach of the partnership agreement or through a court order when their conduct warrants it. Full dissolution is available when the partners can no longer function together or when continuing the business is no longer reasonably practicable. Either outcome carries significant legal and financial consequences, and having experienced counsel in your corner makes a real difference in how that process unfolds.
Put Our Knowledge And Resources On Your Side
Partnership and corporate fiduciary matters are a constant presence on the litigation docket of our lawyers. Dunham LLP has a preeminent AV* peer-review rating through Martindale Hubbell, which is the highest peer-review rating given for legal skill and ethics. Put our experience on your side when you need a lawyer to handle partnership disputes and litigation. For a consultation, contact us online or by calling 512-764-3986.