Whether a partnership is between two people, two businesses, or between an individual and a business, if an individual removes assets illegally from a business for personal gain, it is stealing. Below, we address different types of business theft and what to do if you suspect a business partner is stealing from you.
Business Theft Can Take the Shape of Many Forms Including:
- Intellectual Property and Theft of Trade Secrets: Trade secrets may include customer lists, product designs, business plans, computer software, technical know-how, manufacturing processes, formulas, etc. When trade secrets or other types of intellectual property are taken without permission and their use is not in the best interests of the company, this is considered misappropriation of trade secrets. Texas law permits owners of trade secrets (defined as those with legal title or the right to enforce) to bring civil claims (via a lawsuit) against the misappropriating party.
- Fraud: Fraud occurs when a partner or entity deliberately presents facts that they know to be false in order to deceive other parties involved. When a party enters into an agreement as a result of material facts that were falsely represented, the latter may be liable for any and all damages suffered by the former.
- Embezzlement: Embezzlement is the act of wrongfully appropriating funds that have been entrusted into that person’s care, but which are owned by the business or someone else. Embezzlement is a specific type of fraud, which is defined as “knowing misrepresentation of the truth or concealment of a material fact”. An example of embezzlement that could occur from a business partner is manipulating accounting records to hide the theft of funds.
- Breach of fiduciary duty: Within the scope of the relationship, business partners are under a duty to act for the benefit of one another. Since business partners are considered fiduciaries, a breach of fiduciary duty is when a fiduciary abuses or falls below the standard imposed on them when they are acting from a position of trust. For example, taking money from an account that belongs to the business for personal or other use is both outside the scope of the relationship and against the interests of the business.
What To Do If You Suspect a Business Partner Is Stealing From You
If you believe a business partner has stolen from you or your company, the next step is to contact an attorney. An experienced business litigation attorney can help protect your business from further harm and help make your business whole again. As with any form of theft, the welfare of your business is at stake. You and your attorney can use legal action, such as injunctive relief, to stop illegal activities almost immediately and begin the process of recovering stolen assets or information.
At Hendershot Cowart P.C., our legal team has exceptional credentials and an impressive track record of success in litigation over breach of fiduciary duty claims, fraud and misrepresentation, intellectual property infringement, trade secret violations, non-compete agreement violations, and other related shareholder and partnership disputes.
By retaining a business attorney well-versed in business theft and other disputes, you will be in the best possible position to “stop the bleed” as fast as possible and maximize the amount of damages you may recover. Our business attorneys can also counsel you on legal measures to safeguard your business assets from further theft in the future.
Contact us online or call (713) 909-7323 today to discuss your matter.