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Barrister
Barrister, Attorney
Category: Business Law
Satisfied Customers: 35334
Experience:  16 years practicing attorney, JD, BA, MBA
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I'm the president and CEO of a c corp and own 50% of the

Customer Question

I'm the president and CEO of a c corp and own 50% of the corp shares. The CTO & CFO owns the other 50% of the shares. We are both board members. I discovered recently that he failed to file our corporate taxes for two years, lied about doing so, and when I brought on an accountant to address the issue I discovered that he has been stealing from the corporation. I have a local attorney that assists us in business matters, but before I discuss with her I want to understand what my options are. I assume I can fire him for cause and recover from the theft, but if I do that he still own half of the shares. Could he lose his shares too?
Submitted: 1 year ago.
Category: Business Law
Expert:  Barrister replied 1 year ago.

Hello and welcome! My name is ***** ***** I will try my level best to help with your situation or get you to someone who can.

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You are correct that you could fire him and then sue him civilly for any losses on behalf of the corporation. You can also pursue criminal charges for embezzlement and fraud, which can be charged as a felony for his actions in abusing his position of trust and stealing the money. If he is unable to pay back any money that he stole as part of any civil judgment or criminal restitution, then you can force a sale of his shares through a "partition action" where you ask a judge to order an appraisal of the company and then order a public sale of his interest in the company.

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But you might be able to have your attorney negotiate some type of a buy out where he gave up his shares and in return you don't pursue civil and criminal cases against him for the theft.

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thanks

Barrister

Customer: replied 1 year ago.
Thanks for the response, very helpful.
Expert:  Barrister replied 1 year ago.
You are very welcome. Glad to help any time..
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thanks
Barrister

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