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Richard
Richard, Attorney
Category: Business Law
Satisfied Customers: 45670
Experience:  32 years of experience practicing law and a businessman.
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I am in need of my own lawyer to advise me on a matter relating

Customer Question

I am in need of my own lawyer to advise me on a matter relating to me being an investor/owner or employee with a business...I have been advised that I might be being bamboozled, and I have laid out what we know, and what i need to have occur in order to remain 'doing my work for' this company, or to cut my losses and run away...in which case, the company would probably fold up.

I am interested in someone reading my document, and then advizing me. I have $150 to put towards this matter....but it's a business that stands to become a multi million dollar business if I conitinue to provide monetary support...but im not sure that i'll be 'protected' as an owner...
Submitted: 1 year ago.
Category: Business Law
Expert:  Richard replied 1 year ago.

Welcome! My goal is to do my very best to understand your situation and to provide a full and complete answer for you.

Good afternoon. Can you post your document somewhere on the internet so I can take a look at it? Thanks!

Customer: replied 1 year ago.

will do...please hold

Expert:  Richard replied 1 year ago.
No worries...just let me know. :)
Customer: replied 1 year ago.

https://www.dropbox.com/s/3wvky9jcsgqzwkb/Go%20with%20what%20you%20know.docx

Expert:  Richard replied 1 year ago.
Thank you! Do you have specific questions or would you like me to review it in general and give you my thoughts?
Customer: replied 1 year ago.

i realized there are some missing numbers and dates (as i was just re-reading it).


 


I am trying to determine whether or not i should continue to pay for the living expenses of the two parties who are roommates - one is the inventor and the other the president - the inventor is 77 and is not contributing anything to the living expenses, on the grounds that 'we are being allowed access to the / his IP' which is a crock...


 


or not.


 


my letter was written out with the help of my brother, who is a very savvy business person, as you might be able to tell, I didn't write this myself..but it is all accurate, for the information that I know, without digging around in my emails.

Customer: replied 1 year ago.

i can provide a copy of the promisory note if needed

Expert:  Richard replied 1 year ago.

Thank you! It's good you have your brother because his instincts are good. You are getting the short end of things here and you are doing the right thing by pinning this now. First, do not fund another dime for living expenses...those have nothing to do with the business and the business simply doesn't benefit from any of these monies. Second, the money funded must have been either a loan or an investment. They don't get to determine that it is neither. Thus, they must come to some agreement with you as to which it is and document it as such. They have themselves in a bit of a pickle....if it's a promissory note, then you will want it evidenced by a note and secured by the assets of the business and personally guaranteed by them. If it's an investment, then they've violated all kinds of securities disclosure laws and are likely guilty of securities fraud. Third, in either case, they owe you full disclosure of the company's accounting and books, including money in and out whether by way of compensation or distributions. Fourth, if any money advanced has not been used for the company itself, but rather for personal use, then they are personally liable. BotXXXXX XXXXXne, don't fund another dime, demand full disclosure of accounting and all formation and organization documents within a short specified period of time, demand that they resolve this with signed written documentation acceptable to you within a short specified period of time, and let them know that if they do not timely comply, you have no sense of humor, and are fully prepared to: i) file a civil suit to recover your actual damages for breach of contract plus punitive damages due to their failure to disclose, their use of company funds for personal use, securities fraud, willful bad faith and gross negligence in their accounting and organization; and ii) contact the state securities regulators regarding pursuing them for securities fraud



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Expert:  Richard replied 1 year ago.
The key to remember is you have all the leverage here and you want to make sure to cut off the money supply until you get this documented to fully protect you.
Customer: replied 1 year ago.

ok. the problem is i can't tell who's more full of #$it..the inventor, or the president...who was my boyfriend...I think he 'drank the inventor cool aid' frequently...but he has a background in law enforcement...and i know he's only 'telling me what i need to hear' to appease me, so i'll keep paying.


 


 

Expert:  Richard replied 1 year ago.
That's why you don't want to keep paying. You need to basically stop all the movement and force the issue to get this thing resolved. If it is truly a multi-million dollar business potentially, you must get things resolved meaning you must: i) find out what kind of entity this is and get a look at the company formation documents; ii) negotiate an operating agreement and any other contracts such as employment agreements, promissory notes, security agreements, assignments of IP rights, etc.; iii) get a full and complete accounting of every dime spent and received to date; and iv) finalize the rights of the parties going forward, including...i) who contributes what initially? ii) what if additional money is needed? iii) what are the ownership interests? iv) if owners are going to work for the company, what is their compensation? v) what voting percentages are required for operating and major decisions? vi) buy-sell agreements regarding ownership, including rights in the event of divorce, bankruptcy, death, etc?
Customer: replied 1 year ago.

I understand. do I need to do anything specific with the document I sent to you - like have it written up by a lawyer? or do i present it as it is? my brother wants me to proceed cautiously, but honestly, i have to do this tomorrow in my own opinion. so it's about to get ugly then i'll bet. i don't want to 'play all my cards' at once. and i'm not certain how to start the approach...is there any thing you can do to help me


start by saying X


then follow up with X


(all based on my document)


 


or


 


do i just give it to em...just as it is here.


 


what happens if they say ' well you aren't performing ' up to our standards or your duty per or whatever...

Expert:  Richard replied 1 year ago.

I would do it like this if it were me:

I would start with sending them a short statement that says that all parties need to resolve what has occurred to-date and how we are going forward. That includes the need to: i) produce copies of any and all company formation and organizational documents; ii) produce an accounting of the books to-date; iii) produce all documentation evidencing tangible and intangible assets of the company and any contracts the company has with any other parties. Tell them that all this must be produced within a specified period of time so that all parties can determine the path forward. Let them know that until the path going forward is fully resolved to the satisfaction of all parties, it makes no financial sense for you to provide any more funding.

Let them know secondarily that once the foregoing information is produced and you have had an opportunity to review these materials, then all parties should sit down and resolve everything going forward, including additional funding, ownership, control, compensation, etc. etc. (as much of the issues I mentioned above).

Finally let them know that you want all this resolved within an overall time limit so that all parties are on the same page going forward. Let them know you think this can all be resolved amicably, but are willing, if necessary, to seek judicial relief if that is not possible.

Then, following this correspondence to them, you can get into a more detailed response when they either respond and/or deliver the materials and you have a chance to review and provide a detailed response. Their response to this will also tell you how things are likely to go in the future. If they attempt to terminate you, let them know that's the worst decision they could have made because you will be pursuing all legal and equitable remedies available at law to protect your rights to date and going forward.

Customer: replied 1 year ago.

ok. sigh. not what i was expecting to find myself doing. but i understand.


to solve a problem...i need to know everything about the problem...that's what my business consultant is saying in my ear right now...


thank you for your time and response! it's been excellent.

Expert:  Richard replied 1 year ago.
You're welcome....it's my pleasure. I'll be happy to help you additionally as this progresses!
Customer: replied 1 year ago.

do i log in and find access to you again?


 

Expert:  Richard replied 1 year ago.
Yes...simply ask for "SeekingtoRenderAid" or "insearchoftheanswer" and I will get your questions. Thank you!!
Richard, Attorney
Category: Business Law
Satisfied Customers: 45670
Experience: 32 years of experience practicing law and a businessman.
Richard and 2 other Business Law Specialists are ready to help you
Expert:  Richard replied 1 year ago.


Thank you so much for the positive rating! I appreciate that!

Expert:  Richard replied 1 year ago.
Thanks also for the bonus! I appreciate your kindness and generosity!

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