Quote:
Originally Posted by KevinP73
Before the project was completed the partnership is terminated and Partner A (holding the majority interest) retained all the elements of XXX Body Shop,
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You use different terms that are not compatible, "LLC" and also "partnership."
Assuming it is a partnership, from a legal perspective, I think the quoted sentence above is the key.
When you say "retained all the elements" does that include "retained all of the liabilities?"
If the deal were structured properly, the agreement where the partnership was terminated would expressly say that A retains all the liabilities, AND he also would agree to indemnify B against any claims.
If it is an LLC, the LLC structure should protect A and B from any personal liability. I.e., the customer only has a claim against the LLC and LLC assets, not against A or B personally.
So, if after the termination of the business relationship between A and B, B would be gone from the LLC. A would be the only remaining member of the LLC. (The "owners" of an LLC are called "members," not "partners"). Any claims against the LLC would have to be handled by Member A. B is no longer a member of the LLC. Former Member B can tell current Member A to pound sand.
From what it sounds like, though, A is going to claim that there is some sort of "side deal" where B agreed to perform the work, even after B is no longer a member of the LLC. So, A will seek the best of both worlds. He gets full control of the LLC's *assets* (including collecting for all the work done on the car), while trying to pawn off the *liability* to B. Seems like a lowlife position to take, but it sounds like that's the type you're dealing with.