The High Cost of Unchecked Words: A Cautionary Tale for Business Partners

In any business partnership, especially one involving roles like a co-General Partner, trust and professional conduct are paramount. When that trust is broken through false and defamatory statements, the consequences can be severe and legally binding.⚖️

The circulation of malicious statements, whether privately among partners or publicly on social media, can expose an individual to significant liability. Under Texas law, these actions can give rise to several serious legal claims:

1️⃣Defamation Per Se: Making false statements that injure a person's professional reputation or business can be considered defamation per se. In such cases, financial damages to the person's reputation are often presumed by law.

2️⃣Breach of Fiduciary Duty: Partners and managers owe a strict Duty of Loyalty and a Duty of Care to their company. The Duty of Loyalty requires acting in the company's best interest, while the Duty of Care demands acting with the prudence of a reasonable person in a similar role. Publicly disparaging the company or its managers is a clear breach of these duties.

3️⃣Tortious Interference & Business Disparagement: Knowingly publishing false information that interferes with a company's contracts or harms its economic interests can lead to claims for damages. Such actions can damage critical relationships with tenants, vendors, and other partners, causing direct financial loss.

When these lines are crossed, a formal demand to cease and desist is often the first step. The potential legal remedies are substantial and may include:
A court order for injunctive relief to prevent future defamatory statements.

The forced removal of the individual from their management role for breach of fiduciary duties.

Awards for both compensatory and punitive damages, in addition to attorneys' fees and court costs.

This serves as a critical reminder of the legal weight our words carry in a professional setting. Hypothetically 🤔, this individual has been given the opportunity to retract his/her statements and issue apologies; but has refused thus far.

If you were the recipient of this defamation, how would you proceed?