INTERVIEW ON THE PRICE OF BUSINESS SHOW, MEDIA PARTNER OF THIS SITE.

Recently Kevin Price, Host of the nationally syndicated Price of Business Show, interviewed Alexander Paykin.

The Alexander Paykin Commentaries

Going into business with a partner is often compared to entering a marriage—it’s rooted in mutual trust, aligned interests, and shared effort. But when a partner suddenly cuts off communication, starts making unilateral decisions, or begins prioritizing personal gain over the company’s well-being, that relationship can quickly unravel into legal conflict.

If you’re facing a situation where your business partner has gone rogue, it’s essential to understand your rights and take strategic action. These cases often involve breaches of fiduciary duty—among the most serious legal claims that can arise in a partnership—and may require prompt legal intervention to prevent lasting harm to the business.

Recognizing the Red Flags

Signs of trouble are usually hard to miss. Your partner might start hiding financial records, engaging in off-the-books deals, misappropriating business funds, or even launching a competing venture. These actions typically violate the fiduciary obligations that partners owe to each other.

Under the law, partners are expected to uphold duties of loyalty, care, and good faith. These are not optional—they are binding legal responsibilities. When violated, they give rise to actionable claims that can be pursued in court.

Legal Duties in Focus

A business partner is legally required to put the interests of the company ahead of their own. That means no personal use of company assets, no taking corporate opportunities for themselves, and no acting without proper disclosure or consent. In jurisdictions like New York, fiduciary duties are well-defined by both statute and case law—and courts take breaches seriously.

Understanding Your Legal Standing

If your partner’s conduct is raising red flags, your first step should be to consult your partnership or operating agreement. These documents often contain important provisions for resolving disputes, managing impasses, or removing a partner. If no written agreement exists, then state default laws will govern, and these can vary considerably.

At the same time, begin gathering evidence. Save any communications, financial records, contracts, or documentation that help establish misconduct. If it’s safe and appropriate, you might attempt to discuss the issue directly with your partner—ideally with legal counsel present. If communication breaks down or if the situation escalates, more formal legal action may be warranted.

Exploring Litigation Options

Where there has been financial harm, misconduct, or a breakdown in trust, litigation may be necessary. Claims commonly brought in these situations include breach of fiduciary duty, fraud, misrepresentation, and conversion (essentially theft of business assets). In particularly severe cases, you might seek judicial dissolution of the business, a court-ordered accounting, or an injunction to stop ongoing damage.

Pursuing legal action is a serious step—but so is doing nothing. Delay can reduce your ability to recover losses or regain control, and continued harm to the company may be difficult to reverse.

Preparing for the Future

The best time to deal with disputes is before they arise. A strong, well-drafted partnership or operating agreement can serve as a roadmap in times of conflict. Such agreements should clearly define roles, decision-making authority, exit strategies, and processes for resolving disputes. If your business lacks one—or if your existing agreement is outdated—now is the time to work with legal counsel to fix that.

In Conclusion

A rogue partner can be disruptive and damaging—but you have options. With the right guidance and a clear legal strategy, you can enforce your rights, protect the business you’ve built, and move forward with confidence. Whether the solution involves negotiation or litigation, swift and decisive action is key.

If you’re facing a partnership dispute or internal business conflict, our legal team is here to help. Contact us for a confidential consultation and get the support you need to navigate the path ahead.