Litigation and Business Representation

A business partnership can be formed by creating an official partnership agreement or by simply co-owning and operating a business with someone. Partnership disputes are more likely with an informal partnership; however, even if you have a formal partnership agreement in place a dispute can still undermine the financial security and future success of a business. While taking the traditional litigation route to resolving a partnership dispute is always an option, mediation may be an effective and inexpensive alternative.

Partnership disputes can run the gamut from a relatively small disagreement over management style to a fundamental dispute that threatens the very future of the business partnership.  Common partnership disputes that might benefit from mediation include:

• Breach of contract
• Fraud
• Misappropriation of assets belonging to the partnership
• Financial management disputes
• The revelation of confidential business information
• Ownership rights disputes
• Shareholder disputes
• General disputes about the utilization of partnership resources

Mediation is a type of Alternative Dispute Resolution (ADR) that can be used to avoid a dispute escalating to a formal lawsuit or used to resolve a dispute that has already reached the point of litigation. Using a neutral mediator who has specialized training in dispute resolution, the parties attempt to reach a settlement outside the courtroom. The mediator does not advocate for either party or decide issues in dispute. Instead, the mediator’s role is to work with both parties to try and resolve the dispute without the need for formal litigation. If mediation is successful, the dispute is resolved. If it is not successful, either party may pursue the dispute using traditional litigation methods.

A partnership dispute can undermine the very foundation of a business if that dispute reaches the level of a formal lawsuit filed in court. Not only will a lawsuit distract from the successful operation of the business, but it will drain the business – and the partners — of time and money. If a partnership dispute threatens to become a lawsuit or has already reached the point of litigation, there are several reasons to consider mediation to resolve the dispute, including:

• Effective. Mediation has a high rate of success, due in large part to its less contentious and less formal approach to resolving disputes. Without the pressure of the “winner takes all” outcome of the traditional judicial system, mediation allows the parties to find a mutually agreeable resolution that works for everyone involved. There is also a higher likelihood of finding a resolution that avoids the complete dissolution of the partnership when the parties work with a mediator.
• Efficient. Traditional litigation is expensive for both sides of a dispute – and the longer it takes for a lawsuit to reach the trial stage, the more expensive it will be to litigate. Along with draining the partners of their own financial resources, it will likely threaten the growth and stability of the business. Mediation, on the other hand, is considerably less expensive and the cost of mediation is shared by both parties equally.
• Expeditious. It takes years for a civil lawsuit to make its way through the court system. In the meantime, the business suffers. Mediation offers a way to resolve a partnership dispute before it even becomes a lawsuit or to resolve a lawsuit early in the litigation process before it causes irreparable harm to the business.

If you find yourself facing a partnership dispute that could lead to legal action, mediation should be considered as an effective way to avoid the cost and time of traditional litigation. Our experienced partnership dispute mediator has the experience, skills, and resources necessary to mediate your dispute and help you reach a mutually agreeable settlement.