If you establish a business with a trusted business partner, you expect that person to do everything necessary to ensure that the business prospers. However, some business partners may opt to use the company as a means to fulfill their personal goals. This can result in the misuse of partnership assets and several other issues. If your business partner is engaged in self-dealing, you should contact an experienced Baltimore partnership dispute attorney today.
The Heyman Law Firm can help you hold your business partner liable for violating their fiduciary duties to the partnership. Our firm has seen how self-dealing can destroy a partnership, and we are prepared to help you minimize the damage to your company. To schedule a confidential legal consultation to discuss your claim, contact the Heyman Law Firm at (410) 305-9287, or contact us online.
What is Self-Dealing?
Self-dealing occurs when a business partner betrays their duty to the partnership in order to pursue what is in their own best interest. Self-dealing can encompass a wide range of actions that can hurt the partnership. If you discover your business partner committing any of the following actions, you should consider filing a lawsuit against them.
Stealing Business Opportunities
It is not uncommon for a business partner to have other business ventures outside of the partnership. However, this can become a problem if the partner uses their interest in another business to undermine the partnership. For example, if a business partner is presented with a business proposition that would benefit the partnership and they pursued this opportunity outside of the partnership, this can be construed as self-dealing.
Selling Business Contracts
Selling business contracts is another form of self-dealing that can hurt a partnership. This scenario typically occurs when a business partner awards a contract to a vendor for a certain benefit. The benefit the partner receives could be money, property, or various other items or arrangements.
Embezzlement
Embezzlement is when a person steals money they were entrusted to protect. As an owner of the partnership, it is easy for a fraudulent business partner to access company funds to use for their own ventures.
There are a number of ways that a business partner could commit embezzlement. For example, the business partner could create a fake expense report for an item the partnership needs and then remove that money from the company’s account without purchasing the item. That is why it is important to always be aware of the assets and inventory that your company possesses.
Insider Trading
Insider trading occurs when a business partner uses confidential information obtained by the partnership to direct their personal business decisions. For example, if a stockbroker received a request to sell a certain share of stock from a client and they sell their share of the stock first, this will hurt the client and the partnership.
There are various other forms of self-dealing that were not discussed above. To learn more about filing a lawsuit for self-dealing, you should continue reading and speak with an experienced Baltimore business litigation attorney.
Filing a Lawsuit for Breach of Fiduciary Duty
The partner of a business has a fiduciary duty to the partnership. This means that the partner must always act in the best interests of the business. There are multiple types of fiduciary duties that a business partner must uphold. If a partner committed actions that amounted to self-dealing, they would have breached the fiduciary duty of loyalty.
The fiduciary duty of loyalty states that a business partner must place the success of the partnership above their personal interests. Engaging in self-dealing will breach this duty and possibly other fiduciary duties depending on the circumstances.
It is important to note that filing a lawsuit for breach of fiduciary duty in Maryland is difficult because Maryland, in general, does not have a specific type of lawsuit that addresses this type of case. This means that you may have to bring your case under a theory of fraud or negligence or under a specific statute. That is why it is important to consult with an experienced lawyer that can help you determine the type of case that you need to file. Our firm is here to help you deal with a partner that has placed your business in jeopardy.
Our Baltimore Self-Dealing Dispute Lawyers are Ready to Work with You
If you caught your business partner abusing company assets, you should consult with an experienced Baltimore self-dealing dispute lawyer. The business lawyers at the Heyman Law Firm possess several years of experience handling a wide range of partnership dispute cases, and we will utilize this knowledge to represent you. To schedule a confidential consultation with one of our diligent lawyers, call the Heyman Law Firm at (410) 305-9287.