Published July 21, 2026 · Business Litigation · by Hassan A. Zaarour
Partner disputes rarely announce themselves. A login stops working, a distribution does not arrive, a bank calls about a signature card change. By the time it is unmistakable, the other side has usually had a head start.
The first week matters more than the first month
Evidence in these cases is almost entirely in someone's possession, and possession changes. Before anything else:
- Preserve what you can still reach. Export bank statements, accounting files, contracts, texts, and email while access lasts. Do not delete anything, including messages that do not help you.
- Do not retaliate in kind. Draining an account or locking someone out in response converts a strong case into a mutual one.
- Find the governing documents. The operating agreement, any amendments, the membership ledger, the buy-sell terms, and any employment or loan agreements between the members and the company.
- Write down the timeline while it is fresh — dates, amounts, and who said what.
What the documents usually decide
Four provisions do most of the work: who has management authority, how a deadlock resolves, how an interest is valued and transferred on exit, and whether there is a fee-shifting clause. Where those provisions are absent, Michigan's default statutory rules fill the gaps — and those defaults often surprise the member who assumed a handshake controlled.
Claims that are typically available
- Breach of the operating agreement
- Breach of fiduciary duty by a managing member
- Member oppression, where conduct is willfully unfair and oppressive to a member
- Conversion, where company or personal property was taken
- Accounting, to force a reconstruction of where money went
- Unjust enrichment and, in the right facts, fraud
Emergency relief
Michigan courts can act quickly when the status quo is being destroyed. Depending on the facts, a court can order access to books and records, enjoin transfers of company assets, freeze accounts, or in serious cases appoint a receiver. These require a real showing of irreparable harm, which is a reason to document the harm as it happens rather than describing it later from memory.
The books-and-records demand is underused. It is comparatively cheap, it is often granted, and what it produces frequently reshapes the rest of the case — sometimes in a direction the client did not expect.
The exit question
Most of these cases end in one side buying out the other. The realistic questions are what the interest is worth, who has the cash, and what happens to personal guaranties on the company's leases and loans. Litigation posture matters, but so does whether the business survives the fight — a company run into the ground during two years of litigation makes both members' interests worth less.
This article is general information about Michigan law and is not legal advice for your situation. Facts change outcomes. For advice on a specific matter, contact the firm's business litigation practice or call 313-403-3377.