Legal Question in Civil Litigation in California
General Partnership Dissolution
My father in law and his brother opened a business over 20 years ago together. The brother died early on without a will. My father in law being a generous man decided to give his brothers shares to the surviving spouse as the partnership actually did not have any provisions for this. Over the years this has been problematic as she does not work for the company but decides when to come around and wants to make decision or take out capital.
In the past 4 years she has wanted to buyout my father in law but does not have the capital. She will not sell her percentage as she think she will get cheated and will not have any more income after the sell.
After several years of bickering, my father in law would like this to be over while still being able to keep the business. Is there any way for him to legally remove her from the partnership or control so that he can either pay her off? He is willing to get a third party evaluation or even split the company in half. He just wants it to be over so he run his business in peace.
3 Answers from Attorneys
Re: General Partnership Dissolution
You say that your sister-in-law got your late brother's shares because your father-in-law is "a generous man". That's nonsense. She got them because, as the surviving spouse of a man who died without a will, she was legally entitled to them. You make it sound as if your father-in-law could have kept your brother's shares had he wanted to, but that's not how it works. This was not his decision to make, and he deserves no credit for it.
Whether and how your father-in-law can get your sister-in-law out of the business will depend upon what form of business we're talking about (is it a partnership? a corporation?) and how it was set up. Without that information there is no way to answer your question.
Re: General Partnership Dissolution
Yes, he may have several options, but their viability all depend upon the actual facts and documents, which must be reviewed before being able to give a firm educated opinion. After this many years, it is unlikely he can 'undo' the deal and claim she has no interest. If she is a 'partner', the company can be appraised and either partner could buy out the other if they have the money to do so. Have him contact me to pursue this, if he is serious about getting the experienced legal help he'll need.
Re: General Partnership Dissolution
Yes...he can file a lawsuit against your sister in law if she is not amenable to an amicable resolution of this matter.
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