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lwpat, Attorney
Category: Business Law
Satisfied Customers: 25386
Experience:  Attorney with over 35 years of business experience.
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I agreed to come manage a restaurant start up in CA moving

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I agreed to come manage a restaurant start up in CA moving from NJ to do so. I was promised a moving/sign on bonus, a salary, and 10% equity ownership. I was also told I would be running the restaurant. I received everything except my 10% equity. I was harassed by an over aggressive mother in law of my partner. I worked very long hours for a low salary and we opened a very busy restaurant surpassing our wildest sales dreams. I asked multiple times for my 10% stake knowing the mother in law was not happy with me. They told me they would give it to me but would put their initial investment in the restaurant as a loan to the co. and on the balance sheet and would be paid back 1st. This seems illegal to me and a breach of contract. They said if I don't like it, they would offer me a low severance to return home without my equity. I don't have it in writing but do have emails stating I am 10% owner of the business to be distributed at a later date. what can I do?

Thanks for using JA. I will do my best to answer your questions. DON’T FORGET the your deposit is not used to compensate me until you rate my service. A verbal contract is enforceable and here you do have emails to back up your claim. As such, you can file suit to enforce that contract. You relied on that representation, you held up your part of the bargain, the restaurant is a success, you made a substantial move based on their representation. You have a cause of action called promissory estoppel. Here is an excellent outline with case law.



However, they would be correct to include their initial investment as a debt of the business and insist that it be paid back from any profits but only on a reasonable payment schedule. You are correct in that to do anything it appears you would have to contact a local attorney and let him handle the issue for you. He may be able to negotiate a settlement. Hope that helps and please continue if you have further questions.

Customer: replied 3 years ago.

Thanks, XXXXX XXXXX I do feel it's been a breach of contract but shrouded by a grey area in terms of the investment now being categorized as debt. I thought this is why they are getting the 70% of the profits. Also, there is a friendship between us so it's not black & white, a lot was agreed upon by trust. Somebody mentioned I may want to go the mediation route. What do you think of that? Also, could you advise me as to how much this would cost me roughly in terms of attorney fees?

The attorney fee is set by the individual attorney so you will have to call around your local area and find out. I would anticipate that an attorney would want around %5,000 as a retainer. You would always try to mediate or settle but that is usually after you file suit.
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