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Commercial · Owner disputes
Partnership, shareholder and LLC disputes
When co-owners of a business disagree about money, control or the future of the company, the dispute can threaten the business itself. Fernald & Zaffos represents partners, shareholders, LLC members and companies in these disputes in California and Nevada, including derivative claims, fiduciary duty claims, buyouts and dissolution.
Leads this practice
Brandon C. Fernald · Founding Partner
Lead trial counsel in jury trials in Los Angeles Superior Court. Admitted in California, Nevada, North Carolina and Illinois.
Leads this practice
Adam P. Zaffos · Partner
More than 25 years of complex litigation, including business litigation and unfair competition matters. Admitted in California.
Common disputes
- Breach of fiduciary duty by a partner, director, officer or managing member
- Diversion of company money or opportunities
- Shareholder derivative suits on behalf of the company (Corp. Code § 800)
- Accounting and access to books and records
- Deadlock, buyouts and dissolution (Corp. Code § 1800; Corp. Code § 17707.03 for LLCs)
- Emergency requests for a receiver or restraining order
Restaurant and hospitality owners
We have represented owners of restaurants and bars in Los Angeles in shareholder derivative actions. In several matters we defeated ex parte applications for a temporary restraining order and appointment of a receiver, and then obtained settlements. In another, we compelled arbitration and the lawsuit was dismissed. Prior results do not guarantee a similar outcome.
Nevada companies
Many California businesses are organized as Nevada corporations or LLCs. Nevada law governs their internal affairs, including directors’ duties (NRS 78.138) and LLC member rights (NRS Chapter 86).
Start here
Read the operating agreement first
Partnership and operating agreements often set buyout terms, dispute procedures and arbitration. They usually decide the first moves in an owner dispute.
Commercial results
Shareholder derivative defense · Dismissal
Lawsuit dismissed
Derivative suit against a Los Angeles sports bar chain dismissed after we compelled arbitration
Los Angeles
Prior results do not guarantee a similar outcome.
Common questions
Don’t see yours? Call (323) 410-0300.
My business partner is taking money from the company. What can I do?
You may have claims for breach of fiduciary duty and an accounting, either directly or on behalf of the company. Emergency relief is sometimes available.
What is a shareholder derivative suit?
A lawsuit a shareholder brings on behalf of the corporation against insiders who harmed it. California imposes procedural requirements, including a demand on the board or a showing that demand would be futile.
Can I force a buyout?
Sometimes. The operating or partnership agreement may set buyout rights, and dissolution statutes can lead to a court-supervised buyout.
The other owner asked the court for a receiver. What now?
Act quickly. We have defeated ex parte applications for a receiver and TRO in owner disputes. Prior results do not guarantee a similar outcome.
Our company is a Nevada LLC but we operate in California. Which law applies?
Usually Nevada law governs internal company affairs, while California law may govern other claims. We handle both.
Related
The information on this page is general and is not legal advice. Contacting the firm does not create an attorney-client relationship. Prior results do not guarantee a similar outcome.