Requesting some advice regarding partner dispute.

Hi,

Sorry about starting a new topic. Last year my father decided to start a new business with a partner. At that point I decided to stay out of entire dealing between my father and his partner due to the fact I am in medical school. Med school does not even allow me to have social time, let alone help my dad in his business.

However, my dad just told me that he had a dispute with his partner, and he requested my assistance. This is the story I know and believe so far. Also, the fact remains that I am not a Law person either. And I never ran my own business.


-my father does not have a personal lawyer.
-originally my farther is 1/3 and his partner (lets call him Mr. Q) is 2/3 partner.
-initially my father suggested that Mr. Q and he should not be able to withdraw more than $5000 without double signature.
-however, few months ago Mr. Q withdrew $50,000. My father talked with the bank and requested how this is possible? Bank replied that there is no such agreement with you and Mr. Q. Apparently no such bank form was submitted to make this agreement.
-few months later he also suggested that he be paid extra due to his marketing skills. And told my dad that his degree, management and accounting skills were not worth near his marketing skill.
-recently my dad withdrew $10,000 from company’s account.
-due to this withdraw, Mr. Q. threatened my dad with a fraud law suit, and told him to leave the office.
- Later Mr. Q told my dad that it is reasonable for him to settle this quietly. Mr. Q offered my dad $10,000 to hand over his share to Mr. Q.
- Originally, to start the business, my dad invested $100,000. And currently the company is worth much more.


My personal feeling is that Mr. Q knows my old man had no business and law experience, and he is trying to manipulate my dad. That is why my dad is very upset and anxious, and turned towards me for assistant (even though he does not want me to spend a min away from my studies). Unfortunately, I am no more knowledgeable than my dad.


I have already suggested my dad to hire a general lawyer to guide him with this situation and anything is the future. (I think general lawyer = Primary care physician).


I will appreciate any input and suggestions; you have for my dad in regards to how to deal with this issue from this point on?

Thank you in advance.

To young

I could give you tons of advice, but i'm going to just give you the best piece: Get him a good lawyer ASAP.

Make sure that he secures any documents that could help his case before the partner finds out he's hired a lawyer. He needs to cover his ass now, before this guy buries him. Hopefully it's not too late.

His lawyer will basically go over all this stuff with him.

Good luck.

Tell your dad to go to the office in the middle of the night and photocopy every document there no matter how insignificant it may be. Get it all done in one night without Mr. Q finding out, then get a lawyer.

involve "Mr. Q" into an accident, and make sure he doesn't not come out alive, then.. normally, the compagny should be all in your father hand. (what? i think that a good idea...)

or do like the other 2 said, get a lawyer, and copie all the documents, and since your father only took 10 000, while that other guy took 50 000, i think Mr. Q should be the one with a fraud law suit on his ass for taking so much money without double signature

Well your dad does need to get a lawyer, but your father can't counter sue or anyhting else. All he can do is cover his ass. Office reports, bank statements, and a testmony or two would not be a bad thing either. Also if the partner gave your father a copy of the buy out agreement he should definatly make a copy of it and secure the original.

But hwat everyone else is exactly what your father should do. Also you your self might get dragged into this if you have received any money from your father for anyhting. So you should get documents that shows all the money you have gotten from your father is from his and only his account.

The most important thing is to get lawyer advise, and if the situation goes to the worst then hire a lawyer full time to defend your dad.

There are 2 important things. All the recipes or documents that state that your father made 1/3 of the founding with those 100 000$. With this documents in your hands you secure at least the initial afford, maybe even that he is owner of the 1/3 current value of the business.

The second is any paper or document where they signed that agreement about not withdrawing more that 5000$ even if its a verbal agreement he should try to make his partner sign it. Well if there is no such document these issue wouldnt be a problem, because both of them withdrew money and Mr Q was the more indebted.

The main problem right now is that as you told us if Mr Q wants he can go tomorrow to the bank and withdraw all the money of the business. So it is highly recomendable to talk about this with a lawyer and with the bank. To know what can be done to prevent Mr Q taking all the money he can withdraw from that business acount making the great escape.

So those steps, get all the documents, the most important those that say that your dad is owner of 1/3, talk to the bank to prevent any more money withdrawing and if its not posible talk with a lwayer to see what it can be done. If Mr Q takes all the money your dad is going to have a hard time because even if he wins any demand Mr Q. could make the money disapear and pretend to be in bakrupt or something like that so whatever he has planned to do, do it fast.

Like the rest said. LAWYER ASAP!!!

What an ass. I've seen this kind of stuff happen a lot with small businesses. So many shady people out there. Was he a friend of your dad's before this business? Good luck I hope everything works out and I hope that asshole gets what he deserves.

Thank you very much for everyone’s suggestions.

My dad has contacted a lawyer, and gave him all his documents.

As it turns out (in my opinion), he is trying to scare my dad in to just giving up and walking away. Since my dad has no partnership or business experience in the past. Unfortunately for Mr. Q, I have been raised in digital info world, and have watched plenty of Judge Judy. I think it was a good idea to consult someone (even on the internet) before making some quick decision under threats, verbal abuse and pressure.

Since this is a legal issue now, I probably would not post anymore specific information.
When this is over I will let you guys know what happened, and lessons learned from it.

Thank you all.

Oh man I have not posted on the forums for long time. More than 1 year now.

Sorry to dig up the old thread.

My dad hired a lawyer. And agreed to pay him 28% of total amount that we may gain out of Mr. Q.

My dad's lawyer repeatedly threatened to audit the company and bank accounts with the assistance of a public accountant. After about 8 months of shenanigans. Mr. Q agreed to settle for $100,000.

Money is to be paid in 5 instalments. My dad accepted the deal, got out of the company, and decided to start the business again with a different partner.

I am so happy for my dad. For an old man who has done nothing but labor work all his life; this was definitely a nerve racking experience for him in business world.

I am so relieved.

Also, I have heard that another lady is suing Mr. Q. Apparently, he signed up as a partner in her company. And later stole money from her small business also. Interestingly, time of this incident make me believe that Mr. Q stole money from her company in order to pay my dad's instalments. Hmmmm....

So your dad got out with 2/3 of his initial investment, even though the company is worth more than it started at?

Sounds like Mr. Q still came out ahead

The way it started though, it was pretty much a no-win situation. Mr. Q already had a lawyer, was already skimming funds, and there apparently hadn't been any of the agreements in writing. To Young's father was unfortunately not prepared for the assholes in business, and that's the way these things tend to go.

Lessons learned: Get everything in writing, and involve witnesses, notaries and even a neutral lawyer if need be or if you feel unsure about it. Make sure there are multiple copies of every document in several secure places. Save emails. It's basically cover your ass in every way possible.

I hope your father has much better luck in his new venture.

Congratulations man, my dad owns a small business, I know how that is. Also good lucky with your dads business

if i had 50,000$ i 'd invest it all in crack... and peanut butter. ;)

Seriously, it's BS that he had to give him anything at all, allowing the condition that things are exactly as you present them here. Small business loss.

Quote:

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Originally Posted by bbaucom

if i had 50,000$ i 'd invest it all in crack... and peanut butter. ;)

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fuckin signaturized.

Quote:

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Originally Posted by bbaucom

...and peanut butter. ;)

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A bit off-topic but had to fit in this site here
Peanut butter ftw