Legal Question in Business Law in New York

Can my partner reopen my business with someone else in the same location with the same name and concept?

My small, unique restaurant (LLC with 3 equal members & contributions ) is in debt and facing eviction. If evicted landlord will allow my partner to continue without me. Partner has interested investor who will pay off existing debt and wants to reopen the business with my partner under a brand new company but in the same location, with the same business model and with the same concept. They are probably planning to use the same name. Partner refuses to buy me out. If evicted we are required to leave our property. My partner says he will dissolve our current LLC. Can my partner then reopen a new company with someone else without me or without my consent. It will clearly be the same business that I co-founded.

Asked on 11/13/13, 8:55 pm

4 Answers from Attorneys

Roman Fichman Esq. Law Practice of Roman Fichman Esq.
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Realistically, your question cannot be answered without first reviewing the LLC's operating agreement to determine the rights that you and your partners have. This is the first step to figuring out how to proceed.

This review is not too costly and will only take a few hours at the end of which you will have a much better understanding of your options. I invite you to contact my office at your earliest convenience so you can start getting some answers and relief!

Roman R. Fichman, Esq.

www.TheLegalists.com │ @TheLegalist

email: Info (@) TheLegalists (dot) com

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Disclaimer: This post has been written for educational purposes only and was not meant to be legal advice and should not be construed as legal advice or be relied upon. No intention exists to create an attorney-client relationship or any other special relationship or privilege through this post. The post may contain errors, inaccuracies and/or omissions. You should always consult an attorney admitted to practice in your jurisdiction for specific advice. This post may be deemed as Attorney Advertising.

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Answered on 11/13/13, 9:39 pm
Kevin Connolly Kevin J. Connolly
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Such action by your partner would violate the rule of Meinhard v Salmon, You can sue. He has to include you in the new company, buy you out, or face a suit to recoup all of the profits.

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Answered on 11/14/13, 1:54 am
Frank Natoli Natoli-Lapin, LLC
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As noted, you should absolutely consult a lawyer in private to help evaluate the situation and offer a best course of action. Unless there was some agreement in place, your partner will likely not be able to use the same name without your permission. This is a trademark matter, and the name belongs to the business. Even if the business was interrupted as indicated, it does not mean that the trademark was abandoned.

That said, he quite likely can start up a new business and work out a deal in same location, but he cannot double-deal at the expense of the existing LLC. He has a duty of loyalty and care to the LLC and his other partners. You cannot protect a business concept, so he would be free to do something similar, but of course there may be aspects of trade dress and trade secrets that can be protected.

Again, this is something that you need to address with a lawyer in private. If you would like to discuss further over a free phone consult, feel free to contact me anytime that is convenient.

Kind regards,

Frank

www.LanternLegal.com

866-871-8655

[email protected]

DISCLAIMER: this is not intended to be specific legal advice and should not be relied upon as such. No attorney-client relationship is formed on the basis of this posting.

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Answered on 11/14/13, 7:39 am
Steve Brodsky Esq. CheapNewYorkLLC.com
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All good answers above. Bottom line.... talk to a lawyer.

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Answered on 11/14/13, 8:19 am

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