Shareholder, Partnership and LLC Litigation

In shareholder, partnership, and LLC disputes, millions of dollars and the company itself may be at stake. In such disputes, our litigators are there to protect the rights of partners, shareholders, directors, or the very existence of the business.

Shareholder Disputes

While shareholder litigation presents complex legal challenges requiring skilled and experienced attorneys to unravel. These lawsuits often involve such issues as:

• Deadlock among business owners or directors
• Abuse of power by a majority shareholder (shareholder oppression)
• Control over and access to the company's books and records
• Determining the value of shares
• Decisions to dissolve or liquidate

One type of shareholder dispute is the “shareholder derivative” lawsuit. Brought by one or more shareholders on behalf of a corporation when the corporation has refused to pursue a valid cause of action, shareholder derivative lawsuits occur in almost every industry.

Porter Hedges attorneys have represented clients in every type of shareholder suit, including shareholder derivative suits, which are typically related to such alleged activities as:

• Improper revenue recognition practices
• Misapplication of corporate funds
• Fraudulent billing practices
• Earnings mismanagement
• Accounting discrepancies
• Improper due diligence in company acquisitions

Partnership Disputes

Partnership disputes can easily dissolve long-standing business and personal relationships. Individual partners and the partnership itself may be a significant financial risk when partners engage in activities that breach (or allegedly breach) their partnership agreements or engage in other misdeeds. Such activities may include:

• Violations of partnership agreements, operating agreements, or bylaws
• Ownership and management disputes
• Breach of fiduciary duty
• Usurpation of partnership opportunities
• Withholding profits
• Converting partnership assets
• Competing with the partnership

Because Porter Hedges attorneys are so often called upon to create partnerships for clients, we have a clear understanding of the risks, of everything that can and sometimes does go wrong. Our litigators are experienced in every type of partnership dispute and the many ways in which they may be resolved, from negotiation to arbitration to trial. When other methods fail or are less advantageous to our client, we prepare thoroughly for trial and advocate skillfully for our client.

LLC Disputes

Porter Hedges attorneys regularly represent the owners (members) of limited liability companies (LLCs) in disputes with their co-owners related to operating agreements, member’s rights and responsibilities, and dozens of other sources of conflict. Resolving a dispute through negotiation is always preferable to litigation or even arbitration, and our lawyers are adept negotiators. They are also highly experienced in every form and venue of arbitration and mediation if that is the best solution. But when conflicts between members of an LLC cannot be settled through other means, Porter Hedges attorneys are well equipped to take the matter to trial.

Because LLC litigation can be very complex and may involve extensive discovery, depositions, forensic accounting, and business valuation, our attorneys understand the issues and guide our clients through every step of the process.