Partners who enter into business together have a vision for long-term growth and success, but even with strong operating and partnership agreements in place, there is no guarantee that the vision will align over time. When partnership disputes arise, it’s important for everyone to take the necessary steps to shelter the company from the potential fallout from the dispute.
These disputes arise for a number of reasons—retirement, evolving vision for the business, a new partner taking over for a former partner who passed away or became incapacitated, etc.—but regardless of the reasons, it’s imperative that there is still a sharp focus on what the business needs today to keep going while the dispute among partners is resolved.
At Pence Law Firm, we consult with Oklahoma businesses to help them through major transactions, transitions, and disputes that challenge the very fabric of your work and business survival. When you have a partnership dispute getting in the way of the long-term vision for your organization, you need legal counsel that helps you get through this unblemished or as unblemished as is reasonable, given the circumstances.
Position Leadership to Stay the Course
In many cases, the partners of the business may be the executives and managers who are leading your team, but regardless of who is serving in those roles, they should be equipped with the resources and time necessary to ensure the business runs smoothly during this time. What that means will vary from team to team but should include an honest effort to separate the business from the dispute. If your business is going to survive a harsh dispute between partners, it’s going to need employees who are focused on the work at hand and continuing the mission of growth.
Review Your Partnership Agreement
A strong partnership agreement is designed with foresight, often including language on handling disputes should they arise. The agreement may lay out structured options for resolution, such as buyouts, mediation, or arbitration, which can help settle disputes before they escalate into costly litigation. Reviewing these documents is a critical step; they may reveal essential steps you need to take right away, depending on what they require. For instance, many agreements contain provisions that make mediation or arbitration mandatory. Following these prescribed steps can provide a roadmap for navigating disputes while keeping a lid on costs and minimizing disruption. Being well-informed on these terms puts you in a better position to make calculated decisions that align with the original intentions of the partnership.
Following these prescribed steps can provide a clear and more straightforward roadmap for handling disputes while keeping costs low and minimizing disruption. Being well-informed on these terms puts you in a better position to make calculated decisions that align with the partnership’s original intentions.
Consider Alternative Dispute Resolution Methods
Alternative dispute resolution (ADR) methods like mediation and arbitration can offer an effective path forward. Even if your partnership agreement does not require ADR, these approaches are worth considering to resolve disputes without taking the case to court. The more that gets out from your internal disputes, the greater the risk is to your business.
Mediation and arbitration typically provide quicker, more affordable options for handling disagreements, with mediation allowing a more collaborative approach and arbitration providing a more binding resolution. Mediation is a process guided by a neutral party who helps both sides work toward a mutually agreeable solution, while arbitration involves a neutral arbitrator who issues a binding decision. Avoiding a courtroom dispute through ADR can preserve relationships and shield the business from public exposure and costs associated with litigation.
Talk to an Oklahoma Business Attorney
Consulting with an Oklahoma business litigation attorney can be a key piece of resolving partnership disputes efficiently and effectively while keeping your business running. Your attorney can assess your specific situation, help review and interpret your partnership agreement, and explore options that align with your business’s best interests.
Seeking legal counsel at this stage is essential, as it can help you identify the most strategic steps to reduce the impact of the dispute on your business. Contact the team at Pence Law Firm to get the legal help you need to protect your business’s stability and future during these challenging times.
