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I am in a 50/50 partnership with my business, I agreed to

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Good Morning
I am in a 50/50 partnership with my business, I agreed to the partnership expecting them to add value to my company as they are a big company and claimed to have contacts as well as recourses. I made the common mistake of not understanding the fine print of our agreement. Due to fraud/ theft, bad debts, slow payers and generally the slowdown of the economy my company has not performed as expected. they now want me to buy them out of the contract. The company shows that we are basically insolvent on the books but we are busy trading ourselves out of the situation. Finance is obviously a problem but we are getting through with the assistance from the suppliers.
What must I take into consideration when making an offer to buy them out, they feel they need to get everything out that they invested and carry non of the burden related to bad debts or losses of the company. I cannot get finance as they need to sign off as well unless they resign their position at the company which they are reluctant to do.
Please could I have some advice as to my options and theirs in order to make a fair offer and end the partnership on a good note.
Submitted: 1 year ago.Category: Business Law
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Answered in 5 minutes by:
3/16/2016
Business Lawyer: Asad Rahman, Attorney replied 1 year ago
Asad Rahman
Asad Rahman, Attorney
Category: Business Law
Satisfied Customers: 2,198
Experience: Practicing Attorney with 10 years experience
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I am happy to help. It may be beneficial for us to talk via telephone in order to talk through the myriad of issues associated with a transaction. Generally, they are jointly liable for any debts that occurred while they were part of the partnership. You may actually want to consider having the company appraised by an independent appraiser. They can value the assets vs. the debts to help determine a good starting base for what their interest is worth. Once you have that in writing, working through the other issues becomes a lot easier. One way to motivate them to perhaps exit the company would be to offer to indemnify them against any debts that are collected. Indemnity means you cover their legal expenses and any damages. While that is not a great position to be in for you, it may be the best way to motivate them to sell off for a lower amount or you can ask for more money since you are agreeing to assume all liabilities. Like I said, a phone call might be easier as there is no 100% correct answer here.

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Asad Rahman
Asad Rahman
Asad Rahman, Attorney
Category: Business Law
Satisfied Customers: 2,198
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