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What if Your Partners Hired Guards to Lock You Out of Your Business?

Charles Internicola

by Charles Internicola
National Business and Franchise Lawyer

Date: 01/02/2014 | Category: Partnership Disputes | No comments

 

So‚ you started a business some years ago. Maybe you started off with one or two partners or brought them in later on‚ the business is a success but internally you are faced with a dispute with your partners. Maybe the dispute is based on a legitimate disagreement about business expansion or maybe it is brought on by a partner who is misappropriating assets in the form of hidden distributions‚ personal expenses or a competing business.

An All Too Common Senario…But Armed Guards?

Well armed guards may be a stretch (except if you are Kathleen King) but this “partnership dispute” senario is all too common and known by far too many business owners – including Kathleen King of Tates Cookies.  Ms. Kings’s story and how she built not one – but two successful businesses – and how she responded to her own partnership dispute is quite impressive. Prior to establishing the highly successful “Tates Cookies” Kathleen King started “Kates Cookies” and her self named business was quite a success. She later brought in partners and after some disagreement was faced with a partnership dispute that left her locked-out. In a New York Times Article written by Alex Witchel‚ “One Tough Cookie: How Kathleen King Built Her Chocolate Chip Empire”‚ we learn some more about what Ms. King went through in her own partnership dispute:

…a business deal with partners went bad‚ and she ended up in debt. She lost the building‚ along with the right to the cookies with her name on them. And Then it got personal. The partners hired a security guard and got a restraining order to prevent her from entering the store

A Court Ordered Lock-Out…Losing the Rights to Your Own Name?

Well we dont know all the facts surrounding Ms. King’s dispute but indeed injunctions (court orders) do play a pivotal role in partnership disputes. But the compelling story is what happend next…Ms. King moves on and founded a successful cookie business. Sure she may of lost the right to use her own name (Kates Cookies) but she went on to establish “Tates” and in doing so proved that for many (including the many clients that we have seen) success cannot be stopped – even by business partners that “just dont get it”.

Is There a Proven Course of Action for Dealing with Partnership Disputes?

Sort of like “Standing Orders for Army Rangers” there are a series of facts‚ steps and procedures that must be evaluated by business owners both prior to and after engaging in a partnership dispute. In Kates’ senario I wonder if she and her legal team had taken a more aggressive proactive approach (i.e.‚ be on the offensive and be the one seeking an injunction) whether or not the legal outcome would of been different. We dont have enough facts to know.

However‚ one thing that I have seen is that if handled properly‚ this negative situation (fighting with business partners) in many cases may become unavoidable but if handled properly can set the groundwork for future success. Katleen King is certainly proof of that.

Learn More:

If you are faced with a business lock-out or partnership dispute‚ learn more about Charles N. Internicola’s “standing orders” for effectively dealing with a partnership dispute. Order a completely complimentary copy of Mr. Internicola’s book “The Partnership Dispute Guide”. Also‚  to learn more about “Important Factors to Discuss with Your Lawyer when Faced with a Partnership Dispute”‚ click here.

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