LP P/G Lawsuit Question I am being sued by a debt financier for a personal guarantee agreed to by 4 partners, 2 who sold off

First of all, it is impossible to give you an extensive answer without having reviewed a copy of the partnership agreement, the personal guarantee and other relevant documents. The language of the agreement and personal guarantee will likely be determinative of your rights.

Did the partnership agreement limit the ability of the other two partners to alienate or otherwise dispose of their shares? Was there any provision for giving right of first refusal to the remaining partner (you) before disposing of the shares? It is possible that, depending on the language of the agreement, you may have an action against the two partners that "bailed" and may therefore wish to join them in the law suit.

As for your firing, if there was no employment agreement then I do not see how you can be fired for "cause" as defined by the non-existent employment agreement. On the flip side, Texas remains an "at will" state and without an agreement, your employer does not need a reason to fire you, as long as he is not doing it for an illegal reason.

Is the new owner claiming that you must forfeit your shares and IP rights because of the non-existent employment agreement? Or is he asserting that you must do so under the partnership agreement? Does the guaranty you signed pledge your shares and IP rights as part of the guaranty?

Also, (although this answer only touches the surface), what was the value of the shares surrendered by the two the majority shareholders in return for (I assume) forgiveness of their debt? The lender is not allowed a double recover, but may nonetheless may be trying to double dip by taking your shares and IP rights.

FInally, I do not know how long your current attorney has been pursuing this matter, but I suggest you discuss these matters with him before firing him and seeking other counsel. These matters have a life of their own, and it sometimes seems to the client that they are dragging on when they are really proceeding at the normal pace.

Good luck with your case.


Lee Keller King