You log into the business bank account and find that much of the money is gone. Then you discover your partner changed the passwords and moved company funds elsewhere. When a business partner starts moving company assets without authorization, the situation may call for immediate court intervention.
Can you stop the transfer?
Florida law requires members and managers of certain LLCs to follow duties of loyalty and care under Florida law. Those duties can include accounting for company property and benefits obtained through its use.
When your partner appears to be diverting company assets, you may be able to ask a court for emergency relief. In a judicial dissolution proceeding, a Florida court can issue an injunction, appoint a receiver or custodian and take steps to preserve company assets while the case proceeds.
What can a court do?
The specific remedy depends on the facts and the type of proceeding. Potential court action can include:
- Stopping certain conduct: A court may issue an injunction to restrict actions that could harm the company or its assets.
- Appointing a receiver: A court may place a neutral receiver or custodian in charge of certain company property or operations.
- Preserving company assets: A court can take steps to protect business property while the dispute is pending.
These remedies do not apply automatically. The company must meet the legal requirements for the relief it seeks.
What if assets have already been moved?
A partner’s actions may also support a breach of fiduciary duty claim when the partner improperly uses company property. The company’s operating agreement and structure can affect the duties involved.
Acting before additional assets are moved can affect what relief a court is able to provide. Preserving your financial records, transaction details and other evidence can help show what happened and what relief may be available.
