Negligent Management – Partnership Disputes

In all types of partnerships, some or all partners will have to take on managing roles. These roles should be set out clearly in a partnership agreement and each partner should live up to these contractual responsibilities and expectations. If a partner fails to do so, the success of the entire partnership could be at risk.

Managing partners have a fiduciary duty to the partnership and, as part of that duty, they are expected to always use a reasonable amount of care when making business decisions and to act in good faith regarding the partnership’s best interests. When a managing partner breaches this duty, the other partners may be able to hold them liable for negligence in management. Partnership dispute attorney Ari Casper has helped many businesses successfully resolve disputes and, if you believe your partnership has suffered from negligent management, you should call The Casper Firm in Baltimore today for help.

Consequences of Negligent Management

Negligent management can take many forms, including the following:

Failure to abide by business contracts;
Mishandling partnership funds;
Failure to fully evaluate a business deal;
Entering into an overly risky business deal; and
Hiring unqualified employees.

If negligent management simply results in a loss for the partnership, the partners have the right to take legal action against the negligent partner. However, in other situations, negligent management can result in losses for other parties, such as when a contract is not fulfilled. In many cases, all partners may be held responsible for the negligence of one partner, thus resulting in significant liability for all partners. Due to these consequences, negligent management should be taken very seriously.

The Business Judgment Rule

Not every unsuccessful business decision can result in a finding of negligent management, however. The law recognizes that people sometimes simply make a mistake or unforeseen circumstances may arise. Therefore, following a seemingly poor management decision, a partner may demonstrate that they did, in fact, exercise reasonable care in making an informed decision with the best interests of the partnership in mind. If a partner can show this, they can be protected by the “Business Judgment Rule” and may defend against claims of negligent management.

Call a Maryland Partnership Dispute Lawyer for a Free Consultation

Negligent management by a partner has the potential to cause significant legal and financial issues for all partners. For this reason, it is imperative to take timely action to mitigate the liability and losses faced by the partnership. At The Casper Firm, we assist with partnership disputes in and around Baltimore to help businesses manage potential legal issues in an efficient way. Litigation can often be avoided, however, if you must go to court, business litigator Ari Casper can provide skilled representation of your legal rights and interests. Additionally, if you have been accused of negligent management, you need someone protecting your rights to defend against wrongful allegations and liability. Please do not delay in scheduling a complimentary consultation with our office by calling 410-989-5097 or by using our online contact form today.