Occasionally partners within a company will disagree on the direction of their business. When that occurs, a partnership dispute arises. As a result of personal relationships and history between partners dispute can be as emotional and personal as a divorce. It is not uncommon for partners to claim fraud, theft, and breach of fiduciary duties.
Partnership disputes are often ripe for mediation. Partnership mediation involves a third party neutral who can work with the parties and their counsel, to define the issues, discuss alternatives, and help the partners come to an agreement that satisfies both partners. If mediation is unsuccessful, or the parties cannot agree to mediate, then arbitration should be considered. Regardless of the nature of the partnership dispute, it is probable that the dispute could be arbitrated, especially if the partnership agreement requires arbitration. The partners can agree to arbitrate the dispute. If arbitration is not contractually required, or the parties cannot agree to arbitrate, then a lawsuit can be started seeking to define the rights of the partners. This litigation often results in a claim to dissolve the partnership and apportion the profits and losses between the partners. Needless to say, this process results in the partnership being dissolved and the two partners going their separate ways.