American Chopper – The Lawsuit

An American Chopper - legal issues in business partnershipsI am sure many people have seen the show American Chopper on the Discovery Channel. I am ashamed to admit that I am hooked on the show this year as it pits Paul Tuetul Sr. versus Paul Tuetul Jr. What drew me in this year was the legal battle between Sr. and Jr. as it is a classic dispute between partners.

Previously on the show, Sr. and Jr. worked together and were co-owners of a custom motorcycle company known as Orange County Choppers. A major theme of the show were the fights between Sr. and Jr. Frankly, I thought it was partially an act to draw in more viewers. However, given the lawsuit it appears that there were more to the fights than I truly believed.

From what I can gather from watching the show, the roots of the dispute between Sr. and Jr. are common in many partnership disputes where a partner was brought in at a later time. On one side you have the partner who “built the business the hard way.” On the other side, you have the other partner who came in later and “added value” to help the business grow. In my opinion (based only on watching the show), both Sr. and Jr. overvalue their contributions when in fact it was the team effort between the two to grow Orange County Choppers.

Another theme that is common in a partnership dispute occurs when you have a “money partner” and a “sweat equity partner”. Generally, in this situation, the “money partner” puts in the money to begin the business and handles the business operations. The “sweat equity partner” on the hand, does the work. Many times, these two partners can never see eye to eye, because again, both overvalue their contribution and undervalue the contribution of the other.

In my experience, the catalyst for the dispute between partners is money… or rather the lack thereof. Everything runs fine when everyone is getting paid. However, the differences between the partners come out when the money dries up. I cannot say that Orange County Choppers or that the Tuetuls are out of money. However, I find it reasonable to believe that money was a catalyst in the dispute between Sr. and Jr., although they would never say it. I base this on my experience and the fact that the show disclosed that a valuation was done for Orange County Choppers indicating that the business had a value of $0. If the business has a value of $0… there has to be a money problem somewhere, whether that money problem is receivables, payables or leveraging the assets.

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