Business Partner Disappears. What Now?By Nina Kaufman, Esq.
From the Department of Business Partnership Nightmares comes this plea for help from LordMJ:
Here’s the skinny:
Partner 1 and Partner 2 met in corporate America and started a venture together when both had full-time jobs
Partner 1 left the corporate job and entered grad school, ostensibly to help the business (and supposedly by mutual agreement)
After Partner 1 entered grad school (and gave up his corporate salary, Partner 2 stopped returning phone calls or responding to messages. Had Partner 2 been ticked off by Partner 1’s frantic and angry “where ARE you?” messages? Or was he just fed up with having to hold the bag while Partner 1 slogged through grad school
Operations ground to a halt
There’s credit card debt (amount undisclosed) incurred by or on behalf of the business
So what’s an abandoned partner to do?
Leaving aside a host of questions for further fact-finding (did they form a business entity? If so, what kind? Did they have a written partnership agreement? Did they actually have a business plan? And why on earth would one of them leave a cushy job to go to grad school rather than hire an MBA to help run the business?) there are unpleasant but practical considerations involved in taking the next step (lawsuit). What will it cost to find Partner 2 and haul him into court . . . and is the amount he owes more than that? Also, what is the likelihood that Partner 1 would realistically be able to collect that money? Does Partner 2 have collectible assets? Bank accounts? Regardless of how well-papered their understanding was, Partner 1 could be facing a situation where it’s better to walk away and say “lesson learned,” than to throw good money after bad.