A federal judge has ruled that a Greenwich man who sought $282 million from two former colleagues has failed to prove that they had formed a partnership.
U.S. District Judge Philip M. Halpern dismissed a lawsuit brought by Daniel Lee against Richard Golaszewski of Rye and Stephen Swentzel of Manhattan, July 24 in White Plains federal court.
“The proof adduced makes clear that three at-will employees of 17Capital intended to find employment elsewhere and possibly together,” Halpern found, “not that they formed a partnership or joint venture to do business with other entities.”
Lee was head of fundraising and investor relations at 17Capital, a London private equity firm with offices in New York. Golaszewski and Swentzel were managing directors.
Lee decided to leave 17Capital in early 2021 and proposed a partnership with his colleagues. They discussed the idea, for instance, at dinner at The Brook, a private social club in Midtown Manhattan.
A year later, Oaktree Capital acquired 17Capital, and Lee was fired. Golaszewski and Swentzel took positions with Hunter Point Capital.
Lee claims his former colleagues betrayed a partnership deal and took his ideas with them, “to fatten their own pockets.” He accused them of breach of partnership and breach of joint venture.
There never was a formal, written partnership agreement, Halpern found, but a court can conclude that there is a partnership in fact, based on conduct, intention and relationships.
In the absence of a written partnership agreement, Lee had to demonstrate nine factors, such as sharing of profits and losses, joint management and control, joint liability, and contribution of capital. The same goes for demonstrating a joint venture. There must be evidence, for instance, of an agreement to create an enterprise for profit; and each party must contribute property, financing, knowledge or skill.
Halpern concluded that a jury could find that Lee had established an intention to make a deal and a combination of skills and knowledge.
Golaszewski and Swentzel deny that they formed a partnership with Lee, but even if it is assumed that there was an oral agreement, that is not enough, Halpern said. Lee had to satisfy several criteria.
There is no evidence that the parties agreed to make any capital contributions, Halpern said. There is no evidence of partnership assets. There is no bank account, office, website, telephone number, email address, stationary, logo, financial records, line of credit, debt, contracts or employees. No tax returns were filed. It was not registered to do business in New York and it was not registered with the U.S. Securities and Exchange Commission.
“In light of this failure of proof,” Halpern ruled, “summary judgment dismissing these claims is appropriate.”
Lee also accused Golaszewski and Swentzel of breach of fiduciary duty, for allegedly ousting him from a partnership for their personal benefit
But the failure to establish the existence of a joint venture or partnership agreement, Halpern found, “is fatal to establishing the existence of a fiduciary obligation.”
Golaszewski and Swentzel were represented by White Plains attorneys Russell Yankwitt, Jason Swergold, and Michael Reed. Lee was represented by Brown Rudnick LLP, of Hartford, Connecticut and Manhattan.
