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Joshua
Joshua, Lawyer
Category: Law
Satisfied Customers: 25358
Experience:  LL.B (Hons), Higher Prof. Dip. Law & Practice
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MY PARTNER HAS SENT THROUGH HER SOLICITOR HER CONFIRMATION

Customer Question

MY PARTNER HAS SENT THROUGH HER SOLICITOR HER CONFIRMATION OF RETIREMENT FROM THE PARTNERSHIP AND ALSO HAS MADE PUBLIC NOTIFICATION IN THE LONDON GAZETTE THAT SHE HAS RETIRED FROM THE PARTNERSHIP AND IS NO MORE ASSOCIATED WITH THE PARTNERSHIP. SHE NOW CLAIMS THAT SHE IS A PARTNER AND IS THREATENING TO GET INJUNCTION ORDER TO REINSTATE HER AS PARTNER. WHAT ARE MY RIGHTS TO STOP HER FROM THREATENING THE BUSINESS AND PARTNERSHIP
Submitted: 2 years ago.
Category: Law
Expert:  Joshua replied 2 years ago.

Joshua :

Hello and thank you for your question. I will be very pleased to assist you. I'm a practicing lawyer in England with over 10 years experience.

Joshua :

Is there a formal partnership agreement please?

Customer:

yes there is a formal partnership agreement

Joshua :

Thanks. Do you know what if anything the partnership agreement says about the disassociation or retirement of a partner? The Partnership Act provides unless the agreement says otherwise that the retirement of a partner results in the partnership being dissolved.

Customer:

my partner gave a conditional resignation on 1/12/2013 with 3 months notice to retire from the partnership on 1/3/2014.

Customer:

on 26/2/14 her solicitors sent a mail confirming her unequivocal resignation and retirement date as 1/3/2014

Customer:

They instructed that her name should be removed from all business literature, notices etc and all third parties who do business with the partnership should be informed that she is no more a partner from 1/3/2014

Customer:

She also published in the London Gazette that she has retired from the Partnership and the Partnership now continues with the remaining partner

Joshua :

Thanks. Do you know what if anything the partnership agreement says about the disassociation or retirement of a partner?

Customer:

But now she says that she wants to rescind the resignation and that she is a partner. She has been coming to the jointly owned business premises and bullying and threatening staff

Customer:

yes the partnership agreement clearly states that on retirement the retiring partner has no say in the business and there is no provision for rescinding any retirement

Customer:

as per the partnership agreement she is contractually obliged to sign all documents which ensure the continuity of the business

Customer:

she is refusing to do the same and is in breach of the partnership deed

Joshua :

Thanks. From what you say the partnership agreement provides that the partnership can continue with the remaining partners on the retirement of one of the partners. Is this correct?

Customer:

she has informed the bank that she is still a partner and bank has almost frozen the account

Customer:

yes that's right

Customer:

"the Continuing Partners" shall mean such of the Partners as are members of the Partnership immediately prior to a Determination Date and continue as such members thereafter but if immediately following a Determination Date there shall remain only one Partner then the expression "the Continuing Partners" shall mean that one Partner;"



Joshua :

Thanks. If you have it to hand could you give me the definitiion for the Determination Date in the agreement?

Customer:

Full Size Image

Customer:

i hope you can read it

Customer:

Full Size Image

Customer:

Full Size Image

Joshua :

Frustratingly I can't read the above images as they are too small and I cannot seem to make them any bigger. Do you have any other way of posting the definition by any chance?

Customer:

yes sure!

Customer:

"Determination Date" shall mean in relation to an Outgoing Partner the date of his death, retirement, or expulsion (as the case may be);

Joshua :

Thanks. Finally you mention above she has given a conditional resignation. Could you confirm what the condition(s) were as per her notice?

Customer:

though the original resignation letter was conditional-the conditions being that she should be indemnified from her liability as a personal guarantor to the business morgage and that she should be indemnified from the liabilities that may arise from an unfaiir expulsion claim made by one of the ex partners, the decision to which she is also a party. Both were technically not a workable condition, as indemnifying from director's personal guarantee is within the discretion of the bank and not me, the unfair expulsion case is a jointly fought case and she cannot be indemnified for the outcome; the letter from her solicitor later did not mention any of the conditions when it confirmed her retirement date as 1/3/2014.

Joshua :

Thanks. Hopefully finally could you confirm what the solicitors letter said (omitting any personal details)?

Customer:
"Having clarified our client’s instructions, we would confirm that our client’s resignation will take effect on 1 March 2014." this is what her solicitor wrote on 26/2/2014



In relation to the question of the business premises, we would obviously wish to explore with your client, and the relevant lender, the possibility of our client’s release from the personal guarantee. We appreciate that this will depend entirely upon the agreement of that lender, however, we trust that your client will seek to co-operate given the intrinsic link to our client’s smooth exit from the business.


In terms of all other matters which require attending to upon our client resigning we of course refer to Clause 21 of the Partnership Agreement and Clause 20 of the LLP Agreement as well as the relevant statutory guidance. We confirm that our client will place an advertisement in the London Gazette and insist that your client as the continuing member/partner send out any and all necessary circular letters to third parties with whom the business has dealings.


We confirm that our client will deliver up any books of accounts, records, letters or other documents in her possession that relate directly or indirectly to the partnership and that she will further sign all necessary documentation enabling the business to continue. This will of course include transferral of the relevant GMS contract.


We must insist that our client be removed from all stationery, notepaper and any other documentation of the business with which she is currently associated and that the relevant filing is made by your client at Companies House within fourteen days of her resignation in accordance with the provisions of the Limited Liability Partnerships Act 2000. We further trust, but require confirmation from your client, that no representations will be made on our client’s behalf on or after 1st March 2014 that suggest her to be a partner/member within the business. Obviously, we look forward to hearing from you in this regard
Customer:

Because my partner has exited the partnership without signing the variation document for me to continue the business she is in breach of the partnership deed as well her commitment in the letter of retiremnt

Customer:

because the business potentially may not be able to continue, there is a potential risk of bank foreclosing the loan immediately and the personal guarantees will make us partners liable for the losses

Customer:

as the surety for the loan is in negative equity

Customer:

What i basically need to know is can she get an injunction based on the above facts about her retirement

Customer:

How costly is an injunction?

Customer:

can i get an injunction to stop messing with the business?

Customer:

to stop her

Joshua :

Thanks. Just reviewing the above...

Customer:

ok

Joshua :

Thanks. The letter from the solicitor is unconditional and is a clear notice of resignation. The ex partner cannot unilaterally retract that notice on a whim. On the basis that the resignation was not rejected by the remaining partners under any terms allowing rejection under the partnership agreement she is bound by the terms of her notice

Joshua :

You may wish to write to the solicitor if they are still instructed reserving the partnerships rights in relation to their clients behaviour and request that the solicitor explains to the ex partner her legal position in relation to her resignation and that the partnership reserves its rights to claim damages in relation to a) harassment of remainign partners or staff and b) any damage caused by the ex partner to the business as a result of her behaviour and request an undertaking that the ex partner will not directly contact the partnership in person but will communicate through her solicitor or by direct correspondence only

Customer:

ok

Joshua :

If the behaviour continues the partnership can seek damages for harrasssment (this is also a criminal offence and the police can be contacted if she is harassing staff and partners. In addition, in relation to the bank, consider showing them the solicitors letter confirming the resignation and asking the bank to remove her from the account and ensure that other matters relating to the account are left unimpeded so business can continue.

Customer:

She has fell out with the solicitor (who was her second solicitor) who sent the confirmation of her retirement and her new solicitor(3rd) has written to us:

Customer:

"With respect, our view is somewhat different in that it is our view that notwithstanding any publication in the London Gazette or any other place, my client's position as a Partner in the practice remains. She had made a conditional offer to resign which you had not accepted and in fact made your own conditional offer to resign.







In our letter of 31st March 2014 any offers to resign have been fully retracted and are no longer capable of being accepted by yourself."





Customer:

The conditional offer that he is referrring is all prior to the the 26/2/2014 confirmation of her retirement and publication in the london gazette

Customer:

the new solicitor goes on to state:"Any attempt by you or at your instigation to fetter her movements or undermine her position in any way as a partner with all the rights as a partner will be defended by me on her behalf including an emergency Injunction to restrain your interference in her work.






We trust this will not be necesssary and we can work to resolve these issues by negotiation."


Joshua :

I would not disagree with them were it not for the above solicitors letter. Presumably you will refer them to their clients solicitors above letter which is unequivocal on the point. On the basis this letter was accepted by you she cannot retract her resignation at this stage - the solicitor as one would expect is attempting to do his best for his client but her position would appear to be untenable. On the basis you can demonstrate you relied on the solicitors above unequivocal letter - ideally by a correspondence acknowledging the resignation or failing which through your acts, the resignation would appear to be unequivocal and binding.

Customer:

objectively if you look at the case is there a possibility of her getting an injunction, (but in reality I know that she loathe to spend money on solicitors and has been jumping from one to the other finding some fault or the other with them!)

Joshua :

An injunction can be sought but can be costly for her. Unless she can show that you did not accept the resignation and that you had a right not to accept the resignation under the partnership agreement her solicitors letter would appear to be damning evidence against any attempt for conjunctive relief. She would be liable for costs if unsuccessful and a hearing could cost several thousand pounds if contended by the partnership in terms of both parties legal costs.

Customer:

on an average from your experience how much do you think an injunction would cost?

Joshua :

I think our posts crossed. Providing you can show by correspondence or actions following her above solicitors letter that her resignation was accepted or could not be rejected by you I cannot see that she can retract her resignation. If she can show that her resignation however unequivocal was disputed by you then there is a chance but presumably from what you say this will not be the case.

Joshua :

An application fee is £85 from memory. The costs are the legal fees. If the matter is contested, your costs could be £1-2500 + VAT if fully contested and hers similar. In addition you could make the above threats of claims against her in relation to her behaviour which could raise the stakes for her further.

Customer:

Thanks a lot I think you have done brilliant job with the limited access to the documents

Customer:

any other advice that you would like to conclude with to protect the interests of the business

Joshua :

The main thing at this stage is to consider a cease and desist letter in respect of the ex partners behaviour which appears to be damaging the business potentially and generally reserving the partnerships rights as above as well as clearly stating that her above resignation via her solicitor was accepted including any evidence you have of acceptance. A solicitor can put this together for you or alternatively you could consider the following service to assist you.

Joshua :

http://www.lawdepot.co.uk/contracts/cease-and-desist-letter/

Joshua :

Does the above answer all your questions or is there anything I can clarify or help with any further?

Customer:

THANK YOU VERY MUCH..IT WAS BRILLIANT! HAVE A GOOD DAY!

Joshua :

And to you. I hope all works itself out.

Joshua :

If you have no further questions for now I should be very grateful if you would kindly take a moment to rate my service to you today. Your feedback is important to me. If there is anything else I can help with though please reply back to me though.

Customer:

SURE!

Joshua :

Best wishes

Customer:

If there is any other mechanism by which I can give a verbal feedback other than the rating, which I have already done, for your service I am happy to do so

Joshua :

There is principally just the rating system by clicking on one of the smiley faces however if you would like to give any written feedback as well please feel free though there is absolutely no requirement to do so.

Customer:

OK

Joshua, Lawyer
Category: Law
Satisfied Customers: 25358
Experience: LL.B (Hons), Higher Prof. Dip. Law & Practice
Joshua and other Law Specialists are ready to help you
Customer: replied 2 years ago.

Hello Mr Joshua


 


Further to what I discussed with you earlier, could you please tell me how can I protect my personal assets, if the bank forecloses the loan on the business and calls in the personal guarantee.


 


The loan was taken by a separate LLP formed by 3 partners-Myself, retired partner and the expelled partner to build a GP Surgery.


 


The total loan value is 2.5 million but our draw down so far has been 950,000 in addition to an early repayment charge in the range of 100-150k. The building has not yet come up and as it exists could be valued only 500k to 600k. Hence bank might under the joint and several personal guarantee for 'all' of the money guaranteed ask us to pay the deficit, which would be in the range of 200k per head.


 


My spouse is not party to the business and the director's personal guarantee. She is a joint owner of all my assets. She is a homemaker with no other source of income and have 2 minor children under the age of 10. Can she defend on the above basis any action by bank to attach our properties?


 


will transferring my assets into my wife's name, protect the assets?


 


 

Expert:  Joshua replied 2 years ago.
Have you also give a personal guarantee?
Customer: replied 2 years ago.

As part of Bank's requirements for the mortgage,which was negotiated by the expelled partner, all 3 of us had given in 2010 a personal guarantee in addition to the surety, which is the Business premises. I do not remember getting any legal advice on the impact of this personal guarantee at that time.

Customer: replied 2 years ago.

Mr Joshua,


how long do u think it will take for you to answer my queries?


 

Expert:  Joshua replied 2 years ago.
Sorry for the delay in reverting to you. This is a wide subject and there is a limit to how much I can go into as a follow up question. However in general terms you can give away assets in your own name into another however if you do so without payment or at less than market value there is a period of up to 5 years you have before those gifts cannot be claimed by creditors under the Insolvency Act. It is deliberately made difficult to transfer assets in this way.

If you decide to proceed to start the clock ticking the simplest way to do so is by executing a bare trust in relation to one or more assets you wish to transfer however further advice should be sought before doing so.

If I can assist any further with this please consider raising a further question on the matter and I will be delighted to provide more detail. You can request me by clicking on my profile or visiting the following link:

www.justanswer.com/law/expert-joshua/

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