$4.5 Million Judgment
for Aiken Schenk Clients in Partnership Dispute
Victorious
attorneys overcame burden created by absence of partnership documents
In July 2007, a
three-lawyer American Arbitration Association panel ruled that Aiken Schenk’s
clients were part of an oral partnership that was created in 2001 and were
entitled to receive partnership profits that had been withheld from them.
For three years, the
partnership marketed and sold male enhancement supplements. The partner who
controlled the enterprise’s operations and financial records paid ’s clients amounts that were a fraction of the monies they were entitled
to receive. When they demanded full payment, the controlling partner denied that
the partnership existed.
In 2005, Aiken Schenk litigators Joseph A. Schenk and
Shawn K. Aiken filed suit to recover the
clients’ fair share of the profits. During the litigation, they discovered that
the controlling partner had paid more than $11 million to himself and his wife
but less than $1 million to his two partners.
Attorneys for the
defendant argued that the absence of any partnership documents – such as K-1
statements, partnership tax returns, an agreement to divide profits, etc. –
negated the existence of a partnership.
Schenk and Aiken
countered that it was the original intent of the parties to form a partnership
and that the plaintiffs were due a substantially larger share of the profits
than they had received. Their arguments overcame the burden created by the
absence of partnership documents, and the arbitration panel awarded the
plaintiffs $4.5 million in unpaid compensation.
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