Partnership Disputes

Under Hawaii law, the association of two or more persons or entities to carry-on as co-owners of a business for profit forms a partnership. Once a partnership is recognized under Hawaii law, then each partner owes every other partner a fiduciary duty with respect to the business. This means that a partner has an obligation to other partners to fairly share in the business proceeds, to disclose information pertinent to the business, or to provide an accounting with respect to income, assets, liabilities and debts.

Frequently, disputes between partners may arise with respect to the acquisition of property by the partnership, which property is then used by one partner for his own personal benefit. Additionally, although partnerships may initially be set up so that the partners share equally in power, rights, and decision-making, often one partner may wield powers in excess of his legal authority, to the detriment of weaker partners. In those instances, sometimes the only recourse that a weaker partner may have to obtain what is rightfully his due is to seek redress through the courts. A partner may maintain a claim against other partners for breach of fiduciary duty, for an accounting, or for breach of the partnership agreement. In certain cases, partnership disputes can be resolved short of litigation if all sides are willing to enter into a mediation regarding the areas of disagreement among partners.

If you are involved in a dispute with a business partner and would like to discuss your rights and options, please contact us for a free consultation so that we can determine the best way to protect your interests as a partner.

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