Tysons Corner, VA Business Partner Dispute Lawyers

Common Types of Business Partnership Disputes

While every business relationship is different, there are certain types of disputes that commonly occur in partnerships, joint ventures, and closely held companies. These may include:

Conflicts of Interest

Business partners have a fiduciary obligation to act in the best interests of the business. Problems may arise when a partner competes with the company by launching a similar venture, diverts opportunities or clients for personal gain, or engages in undisclosed self-dealing. When these conflicts of interest are not addressed, they can erode trust, damage the company's reputation, and lead to financial harm.

Misappropriation of Business Assets or Funds

Claims involving misuse of business resources may include actions taken by a partner that caused harm to the business or the other partner(s). A partner may withdraw funds from business accounts without authorization, use business credit cards for personal purchases, or sell or transfer company property for their own benefit. These issues may lead to claims of a breach of fiduciary duty or fraud.

Failure to Exercise Duty of Care or Loyalty

Partners are expected to act with diligence, loyalty, and good faith when managing business operations. Disputes may arise if a partner makes reckless financial decisions without consulting with the other partner(s), fails to file required documentation, or neglects other legal obligations, exposing the company to penalties or lawsuits.

Disagreements Over Business Strategy or Direction

Not all partnership disputes involve wrongdoing. Conflicts may also arise due to differences in vision, leadership style, or risk tolerance. These disagreements can affect a business's operations, and if they cannot be resolved, partners may need to dissolve their partnership through a business divorce.

Direct vs. Derivative Suits Between Business Partners

When legal action becomes necessary, it is important to understand the difference between direct and derivative suits:

Direct Suits

A direct suit is one brought by a partner or shareholder for harm they have personally suffered due to another partner's actions. These suits may address the unequal distribution of profits, denial of access to company records, or a breach of a partnership or shareholder agreement.

To succeed in a direct suit, a partner will need to show that they suffered direct harm due to another partner's actions. Any recovery through the suit will be paid directly to the partner who was harmed. These cases are often more straightforward than derivative suits, with fewer procedural requirements.

Derivative Suits

A derivative suit is filed on behalf of the business entity, usually when one or more partners believe that another partner's actions have harmed the company itself. These suits may address issues such as embezzlement of company funds, misuse of business assets, or unauthorized contracts that bind the company to disadvantageous terms.

In a derivative action, any recovery will typically go to the business, and it may benefit all partners or shareholders. To succeed, the plaintiff will need to show that the business was harmed by a partner's actions. These claims must follow specific legal procedures, and they may be more complex than direct suits.

Legal Support for Business Divorce

When partnership disputes cannot be resolved through negotiation, a business divorce may be the only viable path forward. This process may involve the sale, division, or dissolution of the company. The attorneys at Fox & Moghul assist with all aspects of business divorce, including:

• Valuation and Buyouts: We can perform fair market valuations and negotiate partner buyouts in accordance with partnership agreements or court orders.
• Negotiated Settlements: We can create settlement agreements that protect our clients' rights while avoiding prolonged litigation.
• Dissolution Procedures: We guide clients through voluntary or court-ordered dissolution, including winding up operations, paying creditors, and distributing assets.
• Enforcement of Fiduciary Duties: We can assist with direct or derivative suits to address damages suffered by a partner or the business as a whole.

Why Choose Fox & Moghul for Your Business Partnership Dispute

Our attorneys have extensive experience representing clients in matters involving business law and business litigation. We have:

• Represented clients in multi-million dollar disputes involving corporations, partnerships, and small businesses.
• Received awards from respected organizations, including being named Go To Lawyers for Business Litigation by VA Lawyers Weekly.
• Led CLE seminars to educate other lawyers on issues related to business divorce and business litigation, including a seminar titled "Direct vs Derivative Claims: Permitting Direct Shareholder Actions for Closely Held Corporations."

With our strong understanding of the legal concerns that business partners may face, we help our clients resolve disputes successfully. We can provide representation in cases where litigation may be necessary, and we will fight to protect our clients' interests as they address damages caused to them or their business due to a partner's actions. We can also help clients complete a business divorce and dissolve a partnership.

Contact Our Tysons Corner Business Divorce Attorneys

If you are involved in a conflict with a business partner in Tysons Corner, do not wait until the damage becomes irreversible. Take steps now to protect your interests, address any financial losses or other damages you have experienced, and complete a business divorce. Contact our Tysons Corner, VA business partnership dispute lawyers at 703-652-5506 to arrange a consultation and learn how we can help with your case.