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What Happens When a Florida Business Partnership Ends on Bad Terms?

Orlando, Florida, and Winter Haven, Florida, attorney L. Reed Bloodworth is the managing partner of Bloodworth Law.

Reed handles many Florida business litigation cases and frequently finds the same kinds of disputes — where there is no business operating agreement in place. For example, what happens when a Florida business partnership ends on bad terms?

What Happens When a Florida Business Partnership Ends on Bad Terms?

Reed said that you always hope that if partners decide to end a partnership, that they can do so on an equitable and amicable basis, but a lot of times that doesn’t happen. Reed sees partners locking each other out of offices, computers, and bank accounts.

When that happens, the partner who got locked out is often left with little choice but to sue their former partner or let it go.

It’s a situation that happens a lot, and not only within partnerships but in LLCs and with closely held corporations. This is a recurring issue that Reed sees as a business litigator.

Both Sides Start Losing Money

Reed said there’s a feeling of desperation that you can see in a partner who’s been locked out with no access to the bank funds, or to the company. They’re faced with legal fees to get some or all of what they’re owed. And then, both sides start losing money.

Reed sees these cases among partners together for one or two years, to 10 or 15 years. He looks into what happened and sees that the handwriting began appearing on the wall way before the lockouts occur.

There is typically a disagreement regarding some aspect of the business that began in an argument that festers — it’s not sudden. The partners were incapable of resolving a problem on their own and after time passes, one of the partners says, “I’ve had enough.”

Then, a partner does many things that obviously end the partnership, and have a very negative impact on the partner who’s on the receiving end of the actions. Usually, this partner is surprised … otherwise, they would have taken steps to prevent it.

It’s their livelihood and they’re hurt because this was a partner and a friend, so there’s a lot of anger and resentment. Suddenly they’re on opposite sides of a lawsuit.

Depending upon how successful the business has or hasn’t been, it affects their ability to hire an attorney and pursue their legal remedies to obtain their part of whatever was in the partnership.

Reed has told clients that to resolve the issue or litigate the case, “to try to take the emotion out of it to make business decisions and not make emotional decisions. Let’s focus on the facts, focus on the numbers, and not focus on how mad you are.”

Have a Written Agreement

It’s important to have a written agreement at the beginning of the partnership. If it’s not written down in a business operating agreement, there is no guide for the business when a dispute arises. The arguments will end up in court or in litigation with an attorney who’s going to have to shake it all out.

There won’t be a fast decision, and there will be a costly answer because business litigation is expensive.

Florida attorney L. Reed Bloodworth has handled hundreds of business lawsuits since 2004. Talk with Reed about what Bloodworth Law can do to help you or your business.

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