Partnership and Joint Venture Disputes

The legal duties partners owe one another are among the highest known to the law. Yet all too often, wrongdoers pursue their own interests at the expense of the business and their partners. Thus, courts have recognized that partnerships and close corporations present unique opportunities for abuse. The mistreatment can take many forms: terminating a partner's employment with the company, refusing to declare dividends, changing the management structure, or looting the company for personal gain.

We have substantial experience representing individuals and entities wronged by the adverse actions and combinations of other partners or shareholders. For example, in Russell Grigsby v. ProTrader Group Management LLC*, we represented the CEO and minority shareholder in a closely-held corporation forced out of the business by his fellow partners. Before ejecting Grigsby from the business, which he built from an Austin start-up to a nationwide power with securities trading salons in 20 cities, his partners began negotiating to sell the company to the mammoth securities firm Instinet Group, Inc. After forcing him out, Grigsby's former partners sold the company for $150 million. Brought in by Grigsby's first lawyers to help finance the litigation and try the case, we and other counsel presented Grigsby's case to a panel of arbitrators over four weeks, winning an award of $43 million on Grigsby's behalf. *Grigsby: Attorney Fees: $12,274,249.79; Expenses: $977,466.04.

Unfortunately, joint venturers can also end up in court. In BNP Petroleum Corp. v. Edge Petroleum Exploration, Co., we represented BNP, which developed gas wells with Edge, Carrizo Oil and Gas, Inc., and Square Mile Energy L.L.C. These companies opted out of developing certain wells with BNP, but when one came in, Edge and the others sued BNP for $99 million in an attempt to regain a share of the production. Following a bench trial, the court rejected Edge's claims and, instead, upheld BNP's counterclaims and made a significant award to BNP.

In Farnam Companies v. Stabar Enterprises, Inc., we represented the defendant Stabar, a small, Austin-based pet products company that licensed its products for manufacture and sale to Farnam, a large animal products company in Phoenix. Asked to assume Stabar's representation shortly before the close of discovery and trial in federal court in Phoenix, we recognized that Stabar's counterclaim had far more value than Farnam's claims. We achieved a confidential but favorable settlement for Stabar that included a sale of its primary assets to Farnam, terminating multiple lawsuits in state and federal courts.

Likewise, in O'Neal's Inc. v. Tubes, Inc. et al., our client O'Neal's had to shut down construction of oil refinery cooling units when Tubes supplied defective piping. We obtained a substantial judgment against the tube manufacturer and then settled the case against the distributor, Tubes, Inc., on favorable terms.

If you or a client has a partnership or joint venture dispute, let us put our experience to work for you.