- Jurisdiction
- Tennessee
I am a general partner in a TN partnership which contains 4 partners in total and with one partner serving as the "Managing Partner".
The Managing Partner structured the agreement as such that he has sole authority over all distributions/profits from the partnership.
The agreement has provisions for dissolution/winding up, as well as transfer or purchase of interest rights...but it does not have any provisions for a single partner voluntarily *withdrawing* from the partnership.
With that being the case, if I desire to withdraw from the partnership, provided I follow TN law with written notice, will I be entitled to the proceeds for my current percentage interest in the partnership's assets?
The reason I want to withdraw from this partnership is because there is no ongoing business concern. The company that our partnership was involved with has been sold. Now the Managing Partner is sitting on the proceeds of that sale and intends to maintain complete control over all of it, with distributions to other partners being based solely on his whims as the Managing Partner. I have no power to gain access my percentage ownership of the partnership's assets beyond what the Managing Partner allows.
Theoretically the Managing Partner could decide to gamble away all the partnership's assets and I could be stuck with nothing.
The main original reason for the restrictions on distributions of profits/interest was to prevent undue harm to the company as a result of such distributions. But that is no longer valid, as the company was sold. The only income the partnership generates now is passive investment income. So my withdrawal from the partnership would not damage the other partners at all. The other partners will still have their share of the assets, and there is no ongoing business we're involved in that my departure and withdrawal of assets would threaten.
Thanks in advance for any insight.
The Managing Partner structured the agreement as such that he has sole authority over all distributions/profits from the partnership.
The agreement has provisions for dissolution/winding up, as well as transfer or purchase of interest rights...but it does not have any provisions for a single partner voluntarily *withdrawing* from the partnership.
With that being the case, if I desire to withdraw from the partnership, provided I follow TN law with written notice, will I be entitled to the proceeds for my current percentage interest in the partnership's assets?
The reason I want to withdraw from this partnership is because there is no ongoing business concern. The company that our partnership was involved with has been sold. Now the Managing Partner is sitting on the proceeds of that sale and intends to maintain complete control over all of it, with distributions to other partners being based solely on his whims as the Managing Partner. I have no power to gain access my percentage ownership of the partnership's assets beyond what the Managing Partner allows.
Theoretically the Managing Partner could decide to gamble away all the partnership's assets and I could be stuck with nothing.
The main original reason for the restrictions on distributions of profits/interest was to prevent undue harm to the company as a result of such distributions. But that is no longer valid, as the company was sold. The only income the partnership generates now is passive investment income. So my withdrawal from the partnership would not damage the other partners at all. The other partners will still have their share of the assets, and there is no ongoing business we're involved in that my departure and withdrawal of assets would threaten.
Thanks in advance for any insight.