Partnership gone wrong

[Darren Berg]

I started in a partnership 3 years ago. I was the money man and a seasoned REI guy was going to be the operations. I have gotten all my money back in refinances from my initial investment, but my partner is not fulfilling his end of the deal. One of our properties is going into default and my "partner" won't pick up the phone or respond to a text message.

What is my recourse here? I am assuming it would start with a lawyer. Please let me know any tips

[Patricia Steiner]

The first thing to do is to protect yourself. As the personal guarantor of the loan, it's your reputation and credit at risk. (Lesson learned here: all "partners" should be guarantors). Call the lender and work it out - the lender doesn't want the property; they just want to be paid. And, engage an attorney for the sole purpose of dissolving the LLC. One letter to the (let's not call him a partner anymore...) 'guy' from an attorney will more than likely have him resurface fairly quickly. And, let's face it: his non-response is a response.

The thing about partnerships is that going in is easy, getting out isn't.  Having a partnership agreement that details everything - the obligation of each partner to how it can be dissolved outside a legal proceeding - are must haves.  For now, protect yourself. Getting an attorney to rattle the guy's cage is well worth the expense with the goal of obtaining his voluntary withdrawal without the buyout of his shares in lieu of his non-performance.

Don't wait any longer...resolve the loan delinquency and cowboy up with the 'guy.'