“They’re Bleeding My Business Dry”: How to Stop a Partner Who’s Taking Too Much, Too Often

By Jesse David Eisenberg, Esq. | JDE Law Firm, PLLC

Every week, I hear from business owners who’ve had enough. The story usually starts the same way:

“My partner keeps withdrawing money without telling me. It’s affecting cash flow, payroll, everything. I don’t want to blow up the business — but they’re bleeding us dry.”

If that sounds familiar, you’re not alone. And you may have legal tools to stop it — or recover what was taken.

Is It Illegal for a Partner to Take Money?

That depends on the structure of your business and how distributions or compensation were agreed upon.

• In LLCs: Distributions must typically be made according to the operating agreement. Taking more than your share without approval can be a breach of fiduciary duty.
• In Partnerships: Partners owe each other a duty of loyalty and fair dealing. Excessive draws without consent can lead to civil liability.
• In Closely Held Corporations: Majority owners cannot freeze out or starve minority shareholders through improper salaries or self-dealing.

The key question: Was the money taken consistent with prior agreements, practices, and business needs?

Signs a Partner Is Breaching Their Duties

• Large, unexplained transfers from company accounts
• Excessive “reimbursements” or personal expenses charged to the business
• Refusing to share financial records
• Changing account access or locking you out of decisions

If you’re seeing these signs, don’t ignore them. Courts take fiduciary breaches seriously — but only if you act promptly.

Legal Options to Stop the Damage

If talks have failed, here are the most common legal remedies:

• Injunctions: To freeze accounts or stop further withdrawals while the dispute is pending.
• Accounting Actions: To force disclosure of how money was spent.
• Claims for Breach of Fiduciary Duty or Conversion: To seek repayment and damages.
• Judicial Dissolution: If the business relationship is beyond repair.

You may also be entitled to attorney’s fees and interest if the misuse is proven.

Don’t Wait Until It’s Too Late

The longer you wait, the harder it becomes to recover assets — and the more leverage your partner gains.

If your gut says something’s wrong, get a second opinion — from someone who handles these cases for a living.

📞 Schedule a confidential consult with JDE Law Firm, PLLC:
www.jdelaw.nyc | NY: 718-966-0877 | NJ: 732-490-7120

My business is to protect your business.