Negotiation without consentI was recently informed by my 50/50 partner that she had been in negotiations with another entity to discuss pur...

Question

Negotiation without consent

I was recently informed by my 50/50 partner that she had been in negotiations with another entity to discuss purchase of their business independant of my knowledge. The negotiations began in Nov. 2006 and I was not informed until Feb. 2007. She had gone as far as obtaining financial information and meeting on several occasions. She also signed a Letter of Confidentiality. Once I was informed she was interested in purchasing and wanted to know what I thought, I was shocked and question her honesty at this point. Does this give me any legal grounds to dissolve my partnership with her. She even had a purchase agreement draw up between the 2 parties and my name was not on the agreement. Do I have grounds to sue her because she was representing our company in these negotiations?

Answer

Re: Negotiation without consent

You have a very complicated problem. Partners have an equal ability to bind the partnership as to third persons. Your partner owes you a fiduciary duty. This means she must act with a very high standard of care to make sure your financial interests and the financial interests of the business are not impaired. As to whether or not you can sue her: You have a lot of options on how to proceed. First, you should go consult with an attorney to tell your entire story and let the attorney ask you a host of follow up questions. Your attorney can advise you on the best course. This situation is very serious and one size does not fit all. You must proceed very carefully. Good luck.