When Does a Partner Breach a Fiduciary Duty?
Southern California partnership disputes attorneys provides assistance when disagreements arise among co-owners of a company. In many cases, with the right legal help, disputes can be resolved outside of court and a partnership can become stronger as a result of effective compromise and the partners working together to find creative solutions.
There are some situations, however, where the actions of one or more partners are in violation of a fiduciary duty. These are very serious situations because the partner who has failed to fulfill his duty could be legally liable for damage to the company or losses caused by the failure. Rectifying the problems and working together after a breach of fiduciary duty can also be much more difficult and, in some cases, it is impossible or not desirable.
Brown & Charbonneau, LLP helps companies in situations where it is possible that a fiduciary duty was breached by a partner. Our legal team can assist in determining whether a duty was actually breached. If so, we can assist in taking the right legal actions to recover damages, hold the breaching party accountable and, where appropriate, end the partnership.
We also represent individuals who are partners in an organization and who believe they are unfairly being accused of breaching their obligations. To find out more about how an Orange County partnership disputes attorney can assist with your particular situation when there is a possible breach of fiduciary duty, give us a call.
Examples of a Breach of Fiduciary Duty Among Partners
Partners in a business have a fiduciary duty, which is the highest of the duties a person may owe. A fiduciary duty is the kind of obligation attorneys have to clients and the kind of duty that executors and trust administrators have. In the case of a partnership, all partners owe this duty to the company and to the other co-owners in the business.
A fiduciary duty requires many different things of a partner in a business. A partner has a duty of honesty, a duty of loyalty, a duty of fairness, and a duty to act in good faith. Partners should not enrich themselves at the expense of their business, and should not put their own interests first ahead of their business. If a partner engages in self-dealing, withholds material facts, does not account for profits of the partnership, diverts company opportunities to himself, or engages in other action that harm the company’s interests, all of these are examples of potential breaches of fiduciary duty.
A breach of fiduciary duty is a serious violation that can result in a lawsuit against the partner who engaged in the breach. The other co-owners of the company could pursue a civil case in order to try to hold the breaching partner responsible for losses that occurred as a result of the partner’s conduct. A fiduciary is held financially responsible for damage which is caused through a breach, although there are defenses that can be raised to allegations of a breached fiduciary duty.
An Orange County partnership disputes attorney can assist partners in taking legal action and proving a breach happened, or can provide assistance in helping a partner to defend himself when an accusation of a breach has been made.
Getting Help from Expert Partnership Disputes Attorneys
Brown & Charbonneau, LLP can provide assistance in situations where any type of partnership dispute arises, including when a partner has been accused of a breach of a fiduciary duty. In most circumstances, the goal is to try to resolve the disagreement among the partners through mediation or through other court-of-court negotiation in an effort to preserve the partnership relationship and to facilitate effective ongoing company operations.
While this is sometimes possible when a breach of fiduciary duty has occurred by a partner, this is not always a viable option. For example, if a partner embezzled partnership funds or diverted business from the partnership, the co-owners may no longer wish to continue working with the breaching partner. In such circumstances, it is important that an Irvine partnership disputes attorney be consulted to provide advice not only on pursuing a claim for breach of fiduciary duty but also to assist with taking steps to try to unwind the partnership and move on. Brown & Charbonneau, LLP can help.
To find out more about the ways in which our legal team can assist with disagreements among partners and with claims that a partner has breached a fiduciary duty, give us a call at 866-237-8129 or contact us online today.