Q: Available in house remedies for a partner found missapropriating/embezzling funds from our LLLP?
Limited partner found writing self checks beyond salary (18 checks totalling $65,900 from 2013-2017) all unauthorized and without knowledge of the General Partner.
A document stating what happened and admitting fault should be drafted, it should also lay out the repayment structure with interest including an offset from distributions and in the event of default forcing a buyout of their interest at a discount and possibly a stipulation of judgement for conversion. You should also remove them from all financial accounts.
They lose all access to money, pay back what they stole with interest, and if they don't they lose their ownership and you get an automatic judgement for damages. If they don't want to agree the company will contact the DA and proceed with civil and criminal actions.
I would expect them to sign and within 6 months resign from the company and offer their ownership for sale.
I would absolutely hire an attorney to draft it. The consequences of drafting it incorrectly are pretty high.
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