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Business

The Hidden Risks in Partnership Breakups—Litigation You Didn’t Expect

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 David C. Japha.

The David C. Japha Commentaries

On a recent Price of Business show, Host Kevin Price interviewed David C. Japha, Levin Jacobson Japha, P.C.  

  1. Opening 
“Business partners don’t expect to break up. But when they do, it’s rarely clean—and often expensive.”
  1. Common Triggers of Litigation
Lack of partnership or operating agreement
  • Disputes over ownership of clients, IP, and real estate
  • Death or disability of one partner—who steps in?
  • Alleged breaches of fiduciary duty (self-dealing, diverting assets)
  1. Real-World Example
“I had a case where two friends formed an LLC, each with 50%. No buyout clause. One wanted out, the other didn’t—and the business froze. Litigation took 18 months and six figures in legal fees.”
  1. What Courts Look At
  • Whether there’s a governing agreement
  • Statutory default rules (esp. for LLCs in Colorado)
  • Good faith and fiduciary conduct
  • Contribution history and use of business assets
  1. Practical Prevention Tips
Draft a buy-sell or exit clause early
  • Regularly update agreements
  • Plan for death, divorce, and disability
  • Use mediation or arbitration clauses to lower litigation risk
  1. Closing Takeaway
“The best litigation is the one you never have. Treat a partnership like a prenuptial: plan for the split while everyone’s still smiling.”

Over  his  more  than  three  decades  of  practice,  David  Japha  has  earned  a  reputation  for resolving difficult and complex matters, sometimes being the second or third lawyer to take on a case. David has tried many criminal and civil cases to conclusion and argued numerous appeals, post-conviction cases and cases involving mental health issues. He also  currently represents clients in federal and state administrative matters, including ongoing matters before the Consumer Products Safety Commission. David got his start in litigation before leaving the University of Denver College of Law, where he tried his first DUI case in state court through a program called the student law office.  He also negotiated settlements and argued his first administrative appeal  before the Social Security Administration in the winter of 1984, before his law school graduation in May of that year. Soon after starting out, David shared office space with his current partners, Don Jacobson and Daniel Levin at Ptarmigan Place.  There he learned law office management hanging out his shingle and doing evictions, collections and court-appointed federal criminal cases.  And, it was there, in federal court, that David truly cut his teeth in criminal defense litigation, culminating in his appointment  to  the  Criminal  Justice  Act  committee  (which  oversaw  the  appointment  of  conflict counsel in federal court) by then-Chief Judge Richard Matsch. Over 30 years of practice has given David the opportunity to be involved in some amazing cases,  including  taking  depositions  in Katmandu,  Nepal  in  a  complex  criminal  case  in  1991; representing  a  witness  in  the  trial  of  Timothy  McVeigh  (where  David  was  also  a  credentialed reporter for the Intermountain Jewish News); handling criminal matters in Nebraska, Kansas and California and appearing in Washington State.  David has been an expert witness for the Colorado Supreme Court Office of Regulation Counsel in the area of attorney fees for court appointed counsel.

Learn more at https://www.ljjlaw.com/attorney-profiles/david-japha/.

Connect with David on social media:

LinkedIn: https://www.linkedin.com/in/david-japha-23937912/

 

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kevinprice

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