Partnership and Shareholder Disputes
In any partnership or corporation, conflicts will inevitably arise between partners or shareholders. Most of the time, the partners or shareholders can resolve the disagreement among themselves. Some disputes, however, may involve matters that are integral to the continued operation of the business, or present otherwise intractable differences between the partners or shareholders. In those situations, a skilled team of business and commercial litigation attorneys can help avoid expensive and protracted litigation when possible, or can guide a party to the dispute through the litigation process. Our Chicago partnership dispute lawyers can also help partners or shareholders with time-sensitive needs by providing emergency litigation services.
| Transcript: We represent a number, over the years, of large closely held family businesses where, at one point, they were successful businesses where the relatives got along. In this case, we represented a business that had been founded by brothers. One of the brothers died, and the other–our client was the sister-in-law. The brother-in-law, in this very complicated real estate business, decided he would seize control of the family business and overcharge and cheat his sister-in-law. We came up with a strategy to get the sister-in-law made whole by tens of millions of dollars. After years of trial, we were on trial in that case for two years. We worked with forensic accountants and tax accountants and were able to show that there was a substantial amount of theft, in effect, by the sister-in-law with ghost payrolls and other techniques that the brother-in-law was using to siphon off money from his sister-in-law. |
Partnership and Shareholder Disputes
Significant disputes between partners or shareholders may arise at any point in the life of a business, from disputes during the formation of the company to disagreements over its dissolution. Disputes requiring formal dispute resolution or litigation may include those related to:
- Partnership or shareholder agreements;
- Capital contributions by individual partners or shareholders, or the issuance of shares of other equity;
- Operating agreements, bylaws, or management agreements in a limited liability company;
- Employment agreements, including non-competition agreements and other restrictive covenants;
- Confidentiality or trade secret agreements;
- Breach of fiduciary duty claims;
- Severance agreements for partners, shareholders, officers, or employees; and
- Dissolution agreements, particularly distributions of remaining assets to individual partners or shareholders.
Dispute Resolution Among Shareholders and Partners
Litigation can be both time-consuming and costly, and may not be the best method of resolving differences within a business. Documents filed in lawsuits are usually public record, meaning that litigation may also expose a company’s inner conflict to public scrutiny. Various methods of alternative dispute resolution, or ADR, are available to help partners or shareholders resolve disputes privately. Arbitration, for example, resembles a trial but takes place out of the public eye, and is conducted by a neutral arbitrator with specialized training and certification in dispute resolution. Another common form of ADR is mediation, in which a trained, neutral mediator attempts to facilitate a settlement between the parties.
Litigation Between Shareholders and Partners
When partners or shareholders cannot find a negotiated or mediated settlement, they may wish to proceed to litigation. Litigating a dispute between partners or shareholders requires a careful and measured approach. Emotions may run high during disputes within a business, and our partnership dispute attorneys have experience representing Chicago clients in such disputes both rigorously and objectively, taking care to assert our clients’ rights while protecting the business.
Emergency Relief
Certain situations may arise during a dispute between shareholders or partners that call for a quicker response than is possible through the usual courthouse processes. We can provide our clients with emergency litigation assistance when, for example, they need to prevent an opposing party from taking a certain action, or when they anticipate being the defendant in a lawsuit and want to move first. We can file emergency motions for temporary restraining orders or preliminary injunctions, often on short notice, and can assert our clients’ rights through petitions for declaratory judgment.
For more than twenty-five years, the Chicago partnership dispute attorneys of DiTommaso Lubin, PC have provided business law services to clients in Illinois, Indiana and Wisconsin, particularly in the greater Chicago area and DuPage County. Contact us today via email, at 630-333-0333 to schedule a consultation with a partnership dispute lawyer in Chicago or Elmhurst, Illinois.
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