Hello:

If Herb and Steve are equal partners in a general partnership, and then Herb (with authorization from Steve and on behalf of the partnership) negotiates a general partnership with Jackie (with equal shares), would that make Steve and Jackie partners?

What if Jackie and Herb are general partners first, and then Herb negotiates a deal with Steve? Would Jackie and Steve THEN be partners?

Would it make a difference which partnership came into existence first?

excon

There is an important piece of information missing. In the first situation, when Herb negotiated a general partnership with Jackie, who were the partners? Was Herb a partner with Jackie individually? Or was the Herb/Steve partnership a partner with Jackie? Same thing for the second situation.

Do it this way: refer to the Herb/Steve partnership as HS Associates. When Herb negotiated a partnership with Jackie, were the partners HS Associates and Jackie, or Herb and Jackie? If you intended the first situation, then Steve and Jackie become partners but not equal partners. If you intended the second situation, then Steve and Jackie are not partners.

The second situation is the same as the first one.

Hello Lisa:

Thanks for your quick response.

Ok, here's the deal. I guess it's more complicated than I first lead on. Herb and Jackie formed a partnership first - Herb 49%, Jackie 51%. This partnership was never formalized.

Subsequent to that, Herb and Steve formally formed a partnership (50/50 of Herb's 49%) specifically to work with Jackie, and with the full knowledge of Jackie.

In exchange for their 49%, HS associates transferred assets to Jackie. If fact, they were MY assets primarily. Then she "fired" Steve and kept the assets claiming that she had no partnership with Steve. She also claims that Steve wasn't her employee, nor her contractor either.

Steve has won a default judgment against Herb, but he's judgment proof.

Ok, that's all of it.

excon

If Herb and Jackie's partnership was never formalized, then Herb (and eventually HS Associates) did not have 49% of anything. When HS transferred assets to Jackie was anything put in writing? If not then this gets a lot more complicated. Based on what you've said so far it looks like you have a great lawsuit against Jackie for breach of contract, whether it was verbal or not. I can't see why you bothered to get a judgment against Herb.

I have to go out for a little while but feel free to send me more details by private message. It would help to know what kind of assets you're talking about (land? Equipment?) since that can affect the validity of verbal contracts. I'll take another look at this later when I have more time to think it through.

Thanks again, Lisa:

Yes, of course, I'm Steve. I sued them both, because Herb double dealt, and stayed with Jackie. Herb never answered and we got a default. The judgment is being held in abeyance dependent on the outcome of the Jackie lawsuit.

No, HS associates never had anything in writing with Jackie. As a matter of fact, she "fired" Steve because he was pressing her to sign a contract formalizing their agreement.

The business was purely service oriented, therefore the assets weren't hard assets. They were, however, the entire infrastructure of an operating company. Things like logos, contracts, book keeping systems, manuals, plus he gave his time managing the enterprise. Jackie put in NO money. When the partnership was formed there was nothing. When Jackie "fired" Steve, she got a turn key operation (basically for nothing) with customers lined up to pay her money.

excon

Hello again.

Sorry for all these little postings. In court papers, Jackie admitted her partnership with Herb even though it was never written. She still claims no partnership with me.

My lawyer tells me, that even if we didn't formalize our partnership, if all that parties ACTED like it was a partnership, then it was one and will be found to be one.

I hope so.

excon

Yes, I agree with your lawyer. You took action in reliance upon representations made by both Herb and Jackie, so the court will "imply" a contract and/or partnership. Also, you have a formal partnership with Herb, so the fact that Jackie admitted her partnership with Herb makes your case even stronger. You have a great case against her. I'm surprised that she hasn't made an offer of settlement yet. Don't settle for anything less than the full value of the assets you transferred, because it sounds like you would also have a good case against her for lost profits as well.