Partnership litigation in california fiduciary duties
Partnership Litigation in California: Fiduciary Duties
Litigation attorneys often handle a variety of different types of lawsuits. In
Los Angeles alone there are thousands of different types of businesses with
different legal needs and different legal disputes. For those business
litigation attorneys who handle partnership and corporate litigation,
however, it is important to be well-versed in the California Corporations
Code and the different statutes that govern the partnership relationship. The
fiduciary duties of partners are a key concept in partnership litigation.
What Are The Fiduciary Duties Each Partner Owes To The Other?
California law sets forth a partner’s fiduciary duties in Corporations Code
section 16404. These duties include both duties of loyalty and duties of care.
A partner’s duties of loyalty include:
1. The Duty to Account
A partner and the partnership has a duty “to account to the partnership and
hold as trustee for it any property, profit or benefit derived by the partner in
the conduct and winding up of the partnership business or derived from a
use by the partner of partnership property or information, including the
appropriation of a partnership opportunity.”
In other words, partnership litigation can compel a partner to explain what
money was received and where it was spent. Show me the money!
2. To Refrain From Acting as Or On Behalf Of an Adverse Party
Attorneys must remind their clients that even in the winding up of the
partnership business, a partner may not be adverse or act on behalf of a
party who is adverse to the partnership. In other words, even if the partners
have decided to split up and go their own separate ways.
Wagenseller Law Firm
555 W 5th St, FL 31
Los Angeles, CA 90013
Phone: (213) 996-8338
Real estate litigation Los Angeles