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Category Archives: Disagreement

The Complexities of Partnership Agreements

October 5, 2017

Partnership agreements are rarely as simple as people think they are. I spent a lot of time working on partnership agreements. What I find interesting is a lot of people think partnership agreements are simple. Give me a standard partnership agreement. We’re just doing a normal partnership agreement. These are the types of statements I might hear when somebody’s calling us, but there is a lot more complexity to partnership agreements.

Fundamentally, every partnership is different. There’s different understanding and you need to dig in and understand that dynamic.… Read the rest

Operational Control Versus Ownership Control

September 20, 2017

A lot of times when clients approach us and they’re structuring their business, they’re very concerned about 50-50, who owns 51% of the business, who owns 50% of the business, and who falls below 49% of the business? In very simple terms, these are somewhat important because generally if you don’t do any planning, the person who owns 51% of the business will often have control of the business. Somebody who owns less than 50% of the business will not have control and that makes a big difference.… Read the rest

When a Business Partnership Turns Out To Be Not What Was Expected (Part II)

September 15, 2017

Shortly after Hogan was brought in as a 1/3 owner of Turbine Asset Holdings, LLC (“TAH”), he began helping TAH with business opportunities using his contacts and expertise. [1] One of those business opportunity involved Pratt & Whitney (“Pratt”), which was expected to be a very significant inventory management opportunity worth at least $80MM of a net profit.  Hogan led the daily discussions and planning with Pratt and kept Glassman informed of the progress. Meanwhile, Glassman started contacting banks to finance the deal. … Read the rest

When a Business Partnership Turns Out To Be Not What Was Expected (Part I)

September 14, 2017

The R. Shawn McBride Law Firm, PLLC, frequently writes about a partnership, LLC, and multi-owner entities.  Mostly we have discussed cases or situations where business partners start out on good terms, have a spirit of teamwork and sincerely eager to start a partnership, only to see their relationship weaken over time due to disagreements over management, ownership, or other issues.  But what if there is no intent to be business partners in the first place

AerReach Aero Space Solutions, LLC v.Read the rest

How to Protect Yourself When Things Fall Apart (Part IIII)

September 13, 2017

In Mizrahi v. Cohen, [1] a dentist and an optometrist formed a limited liability company for the purpose of the construction and operation of a mixed-use building in which they intended to set up their individual offices.  They did not have an LLC agreement at the time the LLC was formed but it was implemented a few months later when they purchased the land because the lender required an LLC agreement. The attorney who represented both members at the closing drafted an LLC agreement. … Read the rest

How to Protect Yourself When Things Fall Apart: Business Partnership, Disagreement, and Dissolution (Part II)

September 11, 2017

In Cline v. Grelock, [1] the business partners were two-lifetime friends who started a towing business called American Asset Recovery, LLC (“AAR”) d/b/a Hound Dog Recovery.  To start the business, Grelock and Cline personally guaranteed a bank loan for AAR to buy a motor vehicle for the business.  The business did not succeed. It had significant debts and did not clear a profit.  The relationship between the two co-owners also deteriorated to the point where continuing the business was not an option. … Read the rest

The Dangers of Joint Representation (Part 2)

August 23, 2017

In this post, we will discuss why every client needs to have his or her own lawyer.

It may not be readily apparent to most non-lawyers (and even some lawyers), but in every case or matter where a lawyer represents more than one person, there is potential for a conflict of interest. This means the representation of one client will be directly adverse to another client or there is a significant risk that the representation will be materially limited by the lawyer’s responsibilities to another client.… Read the rest

When to Have a Non-Disclosure Agreement

August 15, 2017

When do you need an NDA, a Non-Disclosure Agreements? They protect your intellectual property. In theory, we should always have an NDA anytime we’re talking to anybody about our business. But in the real world, that doesn’t work. One of my good friends is a frequent investor in businesses, he’s built many businesses and every once in a while he’ll talk to people about their business, without signing an NDA. So he will talk to you and he’s very open minded, he’s probably not going to steal your idea, but he won’t sign an NDA.… Read the rest

All postings are intended to be planning tools to familiarize readers with some of the high-level issues discussed therein. No posting is intended to be a comprehensive discussion and additional details should be discussed with your transaction planners including attorneys, accountants, consultants, bankers and other business planners who can provide advice for your circumstances. This article should not be treated as legal advice to any person or entity.