We consider a generalization of the min-cut partitioning problem where we partition a graph G=(V,E) into two sets V1 and V2 such that |V1∩V2|≤d, d<|V|, and such that |{(u, v)|u∈V1−V2, v∈V2−V1}| is minimized. The problem is trivially solvable using flow techniques for any fixed d, but we show that it is NP-hard for integer values of d. It remains NP-hard if we impose restrictions on the size of V1, i.e., |V1|=k, k∈Z+. The latter problem variation may apply in VLSI layout and hypertext partitioning. We present polynomial time algorithms for the special cases of solid grids and series-parallel graphs. Series-parallel graphs find applications in hypertext partitioning whereas grid graphs model the mapping of a class of Partial Differential Equation computations into parallel machines.