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.
Is there a formal partnership agreement please?
yes there is a formal partnership agreement
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.
my partner gave a conditional resignation on 1/12/2013 with 3 months notice to retire from the partnership on 1/3/2014.
on 26/2/14 her solicitors sent a mail confirming her unequivocal resignation and retirement date as 1/3/2014
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
She also published in the London Gazette that she has retired from the Partnership and the Partnership now continues with the remaining partner
Thanks. Do you know what if anything the partnership agreement says about the disassociation or retirement of a partner?
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
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
as per the partnership agreement she is contractually obliged to sign all documents which ensure the continuity of the business
she is refusing to do the same and is in breach of the partnership deed
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?
she has informed the bank that she is still a partner and bank has almost frozen the account
yes that's right
"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;"
Thanks. If you have it to hand could you give me the definitiion for the Determination Date in the agreement?
i hope you can read it
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?
"Determination Date" shall mean in relation to an Outgoing Partner the date of his death, retirement, or expulsion (as the case may be);
Thanks. Finally you mention above she has given a conditional resignation. Could you confirm what the condition(s) were as per her notice?
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.
Thanks. Hopefully finally could you confirm what the solicitors letter said (omitting any personal details)?
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
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
as the surety for the loan is in negative equity
What i basically need to know is can she get an injunction based on the above facts about her retirement
How costly is an injunction?
can i get an injunction to stop messing with the business?
to stop her
Thanks. Just reviewing the above...
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
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
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.
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:
"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."
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
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."
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.
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!)
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.
on an average from your experience how much do you think an injunction would cost?
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.
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.
Thanks a lot I think you have done brilliant job with the limited access to the documents
any other advice that you would like to conclude with to protect the interests of the business
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.
Does the above answer all your questions or is there anything I can clarify or help with any further?
THANK YOU VERY MUCH..IT WAS BRILLIANT! HAVE A GOOD DAY!
And to you. I hope all works itself out.
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.
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
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.
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?
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.
how long do u think it will take for you to answer my queries?