What are the Grounds for Suing a Business Partner in Illinois?

In Illinois, there are several circumstances under which a partner can sue another partner (Battles v. LaSalle Nat. Bank, 240 Ill.App.3d 550 (1992))(In re Ascher, 141 B.R. 652 (1992)(Hux v. Woodcock, 130 Ill.App.3d 721 (1985)):

1. A partner can sue another for a breach of fiduciary duty, such as if a partner sells partnership property to a third party without approval from all partners (Battles v. LaSalle Nat. Bank, 240 Ill.App.3d 550 (1992))(Nussbaum v. Kennedy, 267 Ill.App.3d 325 (1994).

2. A partner or partnership can bring an action against a co-partner if the plaintiff’s claim can be decided without a full review of the partnership accounts. This means that if the issue between partners can be resolved without an accounting, one partner can sue the other. However, if such an issue requires an accounting, that is the proper remedy to seek under the Illinois Partnership Act (In re Ascher, 141 B.R. 652 (1992)).

3. The capacity to sue is determined under Illinois law, and a partnership must sue in the name of all its partners (Stotler and Co. v. Reisinger, Not Reported in F.Supp. (1987). In other words, to sue a partnership, it is necessary to sue and serve all of the partners (Gerut v. Poe, 11 F.R.D. 281 (1951)).

4. A partner may not sue individually to recover damages for injury to the partnership (Hux v. Woodcock, 130 Ill.App.3d 721 (1985))(Creek v. Village of Westhaven, 80 F.3d 186 (1996)). The lawsuit must be filed on behalf of the partnership and not the individual partner.

5. In cases involving a limited partnership, a limited partner can sue the general partners for alleged breaches of fiduciary and contractual duties arising under a written limited partnership agreement (Illinois Rockford Corp. v. Dickman, 167 Ill.App.3d 113 (1988)). However, limited partners do not have a cause of action for damages to their interest in a limited partnership as long as the partnership exists and has not been dissolved or liquidated (766347 Ontario Ltd. v. Zurich Capital Markets, Inc., 249 F.Supp.2d 974 (2003)).

6. A partner may maintain an action against a co-partner absent an accounting in certain situations, including upon claims involving express personal contracts between the partners, and also upon claims involving the failure to comply with an agreement constituting a condition precedent to the formation of a partnership (Hux v. Woodcock, 130 Ill.App.3d 721 (1985)).

7. Illinois courts may imply rights of action from Illinois statutes under certain circumstances. These include instances where the plaintiff is a member of the class for whose benefit the Illinois legislature enacted the statute; implication of the right is consistent with the underlying purpose of the statute; the plaintiff’s claimed injury is one which the Illinois legislature designed the statute to prevent; and a private right of action is necessary to effectuate the purposes of the statute (Bane v. Ferguson, 707 F.Supp. 988 (1989)).

Why Should You Hire Lubin Austermuehle to Sue Your Business Partner?

  1. Concentration: This firm has considerable experience in business litigation, including disputes among business partners. Firms with a focus on specific areas of law often have a deeper understanding and experience with related legal issues.
  2. Experience: If Lubin Austermuehle has a strong track record of successfully handling partnership disputes, this can be a significant advantage. Experienced lawyers are usually more familiar with the intricacies of the law, negotiation tactics, and courtroom strategies.
  3. Reputation: The firm’s reputation can also be a factor. A firm known for its professionalism, ethical standards, and effectiveness in handling cases can offer greater assurance of a well-managed case.
  4. Client-Centric Approach: If they are known for putting clients’ interests first and maintaining clear, open communication, this can make the complex process of litigation more manageable for you as a client.
  5. Resources: Effective litigation often requires extensive resources, such as access to expert witnesses, forensic accountants, and other specialists. A well-resourced firm can build a stronger case on your behalf.
  6. Local Knowledge: If the firm is well-acquainted with the local legal environment, including the courts and judges, this can be beneficial. Local insight can influence the strategy and proceedings of a case.

When considering hiring any law firm, it’s essential to consult directly with them to discuss your specific situation, understand their approach, and evaluate how well they align with your legal needs and expectations. Contact us for a free consultation online or at 630-333-0333.

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