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RGMacEsq
RGMacEsq, Attorney
Category: Business Law
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Experience:  Licensed Texas General Practice Attorney
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A former friend and I entered into a partnership back in November

Customer Question

A former friend and I entered into a partnership back in November 2005. She put in $30,000 that I was investing and building a business with. The business failed and the investment was lost entirely within a year. Now, almost 4 years later she wants to recoup the entire investment. Given the following:

* I have the legal documentation
* I do not have the accounting documentation
* The partnership was dissolved in 9/15/2006

What recourse or action can she really pursue?
Submitted: 5 years ago.
Category: Business Law
Expert:  RGMacEsq replied 5 years ago.
What state is this located in? How was the partnership organized (LLP, LLC, etc...?)
Customer: replied 5 years ago.
It was in the state of Florida. Organized as an LP. Here's the link on the SunBiz website.

DANGEROUS URL REMOVED?action=DETFIL&inq_doc_number=A05000002073&inq_came_from=NAMFWD&cor_web_names_seq_number=0000&names_name_ind=N&names_cor_number=&names_name_seq=&names_name_ind=&names_comp_name=JDPPARTNERS&names_filing_type=
Expert:  RGMacEsq replied 5 years ago.

Well, she could be coming against you for breach of contract, fraud, and/or breach of fiduciary duties. As a partner, you owed your partner(s) a fiduciary duty, and if she can show that you violated that, then she might be able to recover. Bear in mind there is a 4 year statute of limitations on fraud and a 5 year statute of limitations on contract actions, so she is probably within that.

 

Has she only threatened you with action or has she already filed? This will guide what you do from here on out.

 

 

Customer: replied 5 years ago.
She has threatened with many emails. She has made an offer for me to pay back the monies she put in over time, but she has not filed yet. I have not been served yet. Would that happen to me personally? Or the business?

You see the partnership was structured as an LP managed by my LLC. Of course they have both been dissolved now.
Expert:  RGMacEsq replied 5 years ago.

Any claim that she would have would have to "pierce the veil" of liability protection that you were under. She would have to show that you under-capitalized the business or engaged in fraud or whatever. She might sue just so she can look at the documents to see if she has a case in the first place.

 

So long as you acted correctly and this was merely a business that did not succeed (and you didn't take any big risks), then you should be okay. That doesn't mean you won't be sued, but you should probably prevail

 

That being said, I would talk to an attorney regarding this case. This is something that you want competent local counsel telling you the steps that you should take.

 

Good luck to you!

Customer: replied 5 years ago.
Maybe I didn't explain the situation well enough. The partnership was designed to TAKE RISKS because it was an investment partnership that had the right to invest in any type of business. It started with publicly traded stock and then purchased an internet publishing company, which eventually went under after having made no income. So that's how we've gotten to here.

My only concern is documentation, which there is very little and I don't win, I will have to pay back the monies and then what?
Expert:  RGMacEsq replied 5 years ago.

I understand that. Your responsibility was to not take unreasonable risks, under the circumstances. If you did your due diligence and thought this was a good investment, and this woman knew those risks, then you should be fine.

 

In terms of documentation, get what you can find. So long as you didn't destroy or otherwise lose the documentation to hide evidence, you should still be okay. If you did, however, then there is going to be a presumption that the evidence was against you. This is whether the judge believes that you destroyed it or lost it because it was bad for your case. If he doesn't believe this, then you should be okay.

 

In terms of what will happen if you don't win, that is contingent upon this woman "piercing the veil" of asset protection (LLC and LP are limited liability organizations and so need this doctrine to get to personal assets). If she is able to pierce the veil, then she can come after personal assets. But if not, then she can only go after company assets, and as the companies are dissolved and have nothing, then there is nothing that she can get.

 

Hope that helps. Good luck!

RGMacEsq, Attorney
Category: Business Law
Satisfied Customers: 12221
Experience: Licensed Texas General Practice Attorney
RGMacEsq and 2 other Business Law Specialists are ready to help you
Customer: replied 5 years ago.
It helps a lot. Thanks.
Expert:  RGMacEsq replied 5 years ago.
Thank you. Good luck to you.

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