Can Managing Partner Charge the Partnership for Work Performed by His Girlfriend ?
In Birnbaum v. Birnbaum, 73 NY2d 461, 539 N.E.2d 574, 541 N.Y.S.2d 746 (1989), it was held that a managing partner could not charge the partnership for work performed by his girlfriend (later wife) for work he could have done for the partnership.
Partnership Law 43(1) states, "Every partner must account to the partnership for any benefit and hold as trustee for it any profits derived by him without the consent of the other partners from any transactions connected with...conduct...of the affairs of the partnership."
Such is self-dealing, "placing his personal interests in conflict with those of the partnership." Reiff v. Shifrel, 268 AD2d 514, 702 N.Y.S.2d 362 (2d Dept., 2000).