Partnerships and Close Corporations

Overview

Friedman Kaplan has extensive experience in both transactional matters and litigation involving partnerships and close corporations in numerous industries, serving such firms and their owners at all stages of the corporate life cycle, from formation to expansion, reorganization, dissolution, and, in many cases, through a "business divorce."

The firm’s corporate department represents partnerships and close corporations in entity formation, financing transactions, executive employment matters, mergers and acquisitions, reorganizations, and joint ventures. We also advise such entities and their management on compliance matters, partner and shareholder rights and duties, as well as a variety of operational and financial matters.

Our litigation department has extensive experience with thorny, so-called "business divorce" matters and other partnership and close-corporation disputes, in connection with, or as a result of, partners or shareholders deciding to go their separate ways. Such matters often involve family members or close friends or associates, making them especially contentious and requiring particular sensitivity. Each such matter involves a unique array of personal, financial, factual, and legal factors and calls for the tailored strategies at which our firm excels designed to meet the client’s objectives as to each factor. Our attorneys bring to these matters a strong business sensibility, tenacious advocacy, discretion, and creativity borne of decades of experience helping partners and shareholders resolve or move on from their disputes, whether through litigation or alternative dispute resolution mechanisms such as arbitration and mediation.

Selected Litigation Experience

• We successfully represented a co-owner and co-managing member of a real estate management company, which oversees a portfolio of properties in and around the New York metropolitan area, in a AAA arbitration arising out of a “business divorce” between our client and his partner.  Following a seven-day evidentiary hearing, the AAA panel ruled in favor of our client. The arbitrators removed our client’s adversary from the management of the real estate management company, confirmed his removal from the management of several affiliated companies, and ordered him to repay funds he misappropriated from the management company, its affiliates, and their investors.  The arbitrators also determined that our client was entitled to an award of attorneys’ and arbitral fees he incurred in prosecuting the arbitration.

• We represented a former partner at a private equity firm in connection with the negotiation of a settlement for seven-figure additional compensation following his ouster from the fund by his partners.  
• We represented a hedge fund seeding firm in its attempt to enforce a non-compete agreement with the principal of a hedge fund. The matter was arbitrated before the American Arbitration Association and resulted in a settlement.
• We represented a major real estate developer in connection with litigation related to a former partner’s claims that he was entitled to substantial portions of various properties. The motion to dismiss was granted for certain of the claims, and this dismissal was upheld on appeal. We were able to procure a positive settlement for our client in relation to the remaining claims before they were tried.
• We represented a partner in a restaurant group in connection with efforts to collect on promissory notes and with claims of improper termination against the individual’s partner, which had tried to force our client out of the partnership and retain money to which our client was entitled. We successfully defeated a motion for a temporary restraining order to enjoin our client from participating in the enterprise, and then settled the case.
• We represented partners of the largest law firm ever to file for bankruptcy in pursuing their rights and negotiating resolution of their claims in the bankruptcy action.
• We represented a developer of multi-family residential properties in connection with a contract dispute related to the liquidation of a partnership. 
• We represented a boutique investment bank in connection with claims against a former partner who had unfulfilled obligations to the firm with respect to a forgivable loan and an equity contribution, and also with respect to the employee’s diversion of a substantial M&A matter on his departure.

Selected Corporate Experience

• We represented a private equity fund in connection with the establishment of a new fund in the People’s Republic of China. We worked closely with the fund formation counsel to draft the offering documents and the limited partnership agreement.

• We represented a privately-held company as borrower in connection with the negotiation of a $150 million loan agreement with a strategic investor, with repayment to be made either in cash or in selected assets held by the borrower.

• We represented a major privately-held telecommunications company in its formation, and continue to represent it on an ongoing basis in connection with structuring and equity financing matters.

• We represented a privately-held luxury retailer in connection with corporate structuring and financing matters.

• We represented a group of senior Credit Suisse bankers in connection with their departure from the bank and their formation of a new private equity fund focused on infrastructure.

• We represented a bankruptcy administration company in its $2.2 million seed financing round.

• We represented a private equity fund in connection with a joint venture to construct low-cost housing in the Middle East.

• We represented two partners of an investment group in connection with their buyout of the equity of a third partner.