This was certainly an unusual situation, where we were able to not only compel a 45% equity partner to tender his share of the business - and without litigation - but to sign a non-compete against the business on the way out the door.
How We Convinced This Partner to Tender His Shares - & Sign a Non-Compete (Even Though It Wasn't Part of the Original Partnership Agreement)
In a word - we caught this partner red-handed; we had an email that he sent, using his company email, to an important client saying,
"We need that page ripped ... and a domain that masks who it actually is ... We wouldn't want [my partners] to come across it."
At this point, we sent him a draft complaint with several causes of action, including breach of fiduciary duty, and tortious interference with the business's client contracts, telling him that unless we were able to reach an agreement on the terms of his exit from the company, we were going to file suit.
At the end of the day, we were able to settle the case, with this departing partner tendering his shares, agreeing to a six-month non-compete and non-solicitation clause regarding the primary line of the business, in exchange for our waiver of the right to pursue him to recover the draw he received during the time of his disloyalty to the company.
The Takeaways
In truth, there are two (2) takeaways from this story:
First, from the perspective of the disloyal partner - if you're going to deal behind your partners' backs, for the love of G-d, don't do it from your corporate email account or cell phone, where there's a distinct possibility you're going to get caught; and,
Second, from the perspective of the partners who were wronged/jilted - if you want to have any leverage at all in negotiations, make sure you do your homework - there is just no substitute for concrete proof.
