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Rapid Action To Save A Partner’s Interest

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On Tuesday morning, June 19, 2012, we obtained a Temporary Restraining Order and injunction for a client in a partnership dispute. Triton Investment Group owned 46.5% in a Wyoming limited liability company headquartered in Houston. Another member/owner of the limited liability company, Texas Energy, decided to lock out Triton Investment Group from the company.

The owner of Triton, an individual, was also a Manager of the Wyoming company. So both Triton and its owner and Manager were locked out. There was no warning; no vote of the members; and there was certainly no authority for Texas Energy to take this bold, unilateral step.

This is a classic case of breach of fiduciary duty by a partner against another partner.

As one can imagine, this is about as emergent a situation as can get in a partnership dispute. The owner of Triton walked into our office on Monday night at 9:00 p.m. Literally burning the midnight oil, we moved into rapid action and began the process to prepare an Application for Temporary Restraining Order and Temporary Injunction.

The primary objective in seeking this kind of relief is to ask to court to reinstate Triton as an owner in the company and reinstate the Manager that was locked out. There is nothing a person or a company can do when another partner takes extreme measures to block another partner’s rights in a company other than to go to court, get an order to reinstate the person, and resume company business—as difficult as that may be. Otherwise, each partner or member will just simply continue changing the locks on the doors, and how may time can that be done to get the point across that the other partner does not have the power to lock the other out?

Less than twelve hours later by Tuesday morning, we were before the emergency judge in Houston, asking the judge to grant our request for reinstatement. The judge heard our request on an ex parte basis, meaning we had such an emergency that we believed giving notice to the other side would cause us additional harm. The Harris County District Court emergency judge agreed with our request and issued a Temporary Restraining Order, giving Triton its rights back in the company and letting the Manager resume his duties.

Having the court’s power behind a locked out partner is vital, and Mahendru, PC was able to get that accomplished within twelve hours of the client walking in the door, presenting its emergency, and giving us the opportunity to help protect its interests.

Once the bad acting partner was served with the Temporary Restraining Order, we got his and his attorney’s attention.

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