CONTENTS
- 1. The Client's Situation
- - The Client's Account as Heard by the Namyangju Civil Attorney
- 2. Knowledge Relevant to the Case, Explained by the Namyangju Civil Attorney
- 3. Matters in Which the Namyangju Civil Attorney Assisted
- - The Namyangju Civil Attorney's Argument ① No Settlement Amount Due to the Deficit
- - The Namyangju Civil Attorney's Argument ② Embezzlement by the Plaintiff
- 4. The Result of the Namyangju Civil Attorney's Assistance
1. The Client's Situation
The client, who currently runs a cafe, was in a difficult situation because the friend who had co-founded the business suddenly withdrew from its operation and filed a suit claiming a settlement amount.
Seeking assistance, the client looked for an attorney with extensive civil experience and came to the Namyangju office.
The Client's Account as Heard by the Namyangju Civil Attorney
The client explained that a few years earlier he had founded a cafe with a friend, agreeing to split the profits fifty-fifty, and that at first business went well and running the cafe together was rewarding.
Before long, however, sales plummeted, and the friend unilaterally notified the client that he would withdraw from the partnership and asked the client to calculate a settlement amount.
The client explained that the early profits left nothing after deducting the investment in interior fitting and other costs, and that with many loans still outstanding and sales having plummeted, there was little money available to settle.
The client explained these facts, but the friend grew angry and filed a suit claiming a settlement amount, so the client came to the Namyangju civil attorney for assistance.
2. Knowledge Relevant to the Case, Explained by the Namyangju Civil Attorney
As in the client's situation, forming a partnership and jointly carrying on business activities may legally be referred to as a partnership association.
As in the client's case, when someone withdraws from a partnership association, the partnership property must be divided by calculating the shares of the withdrawing member and the remaining members.
However, if the financial position is in deficit at the time of withdrawal from the partnership association, there is no share to calculate, so no refund can be received.
There is a relevant precedent, as follows.
(Supreme Court Judgment of July 29, 2021, 2019Da207851)
In this case, if there was no specific contract on the distribution of the settlement amount, it is calculated according to the profit-and-loss distribution ratio, and if that ratio was not set, it is calculated according to the ratio of capital invested.
Accordingly, as in the client's case, when 🔗rescission or termination of a contract arises between business partners, the property should be divided through an appropriate agreement, but if no agreement is reached between the parties, the assistance of an attorney experienced in this area is needed.
3. Matters in Which the Namyangju Civil Attorney Assisted
The Namyangju civil attorney carefully reviewed the conversations, documents, and other materials concerning the partnership between the client and the plaintiff, and on that basis presented pleadings that could work in the client's favor.
The Namyangju Civil Attorney's Argument ① No Settlement Amount Due to the Deficit
The client's cafe was already in such a severe deficit, after several months of poor sales, that even the monthly rent was difficult to cover.
The plaintiff was aware of this, yet still demanded an excessive settlement amount.
The Namyangju civil attorney emphasized that there was no property to be allocated as a settlement amount between the client and the plaintiff.
The Namyangju Civil Attorney's Argument ② Embezzlement by the Plaintiff
The plaintiff had been solely responsible for the accounting throughout the partnership.
However, records remained showing that the plaintiff had used operating funds for personal purposes during that period, such as purchasing personal items under the name of store operating expenses.
The attorney submitted this as evidence and emphasized that, because the plaintiff had in fact contributed to the store's losses, calculating any settlement amount was all the more difficult.
4. The Result of the Namyangju Civil Attorney's Assistance
The court, accepting the attorney's argument, issued a judgment stating, “The plaintiff's claim is dismissed. The costs of the litigation shall be borne by the plaintiff.”
As in the client's case, in civil litigation involving settlement amounts, damages, and similar matters that arise when a partnership breaks down, gathering evidence is more important than anything else.
For this reason, it can be helpful to secure materials that show the financial flow, such as transaction records, receipts, contracts, and text messages.
To do so, rather than judging the matter alone, it is most important to obtain the assistance of an attorney experienced in civil trials.
If you are facing a situation like the one above, we recommend obtaining an 🔗attorney referral from Daeryun Law Firm.
This content is based on actual case studies of Daeryun Law LLC with some adaptations, and the copyright belongs to our firm.
Unauthorized reproduction, duplication, or distribution and other copyright infringements may result in legal action under applicable laws.
