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socrateaser
socrateaser, Lawyer
Category: California Employment Law
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Experience:  Retired (mostly)
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HELLO, OK , SO I WORKED FOR A WATER COMPANY AND

Customer Question

HELLO,

OK , SO I WORKED FOR A WATER COMPANY AND THE OWNER SOLD IT AND COULD NOT BE INVOLVED IN ANOTHER WATER COMPANY FOR 3 YRS OR COULD SHE LEND ANY ONE MONEY THAT HAD A WATER COMPANY . SO SHE GAVE ME AND ANOTHER EMPLOYEE 50k EACH AND TOLD US TO OPEN UP OUR OWN WATER BUSINESS, AND IN 3 YRS SHE WILL COME BACK .

WE TOLD HER THAT 100k WAS NOT ENOUGH MONEY TO START A WATER BUSINESS. SHE SAID THAT I COULD CONTUINE ON HER PAYROLL AND STAY AT THE PROPERTY LOCATION
AND WORK FROM HERE AND THAT WAY SHE COULD PAY ME MY SALARY AND THEN I COULD USE THAT MONEY FOR THE NEW BUSINESS..

A NEW BUSINESS THAT SHE WAS THE WAS THAT CAME UP WITH THE NAME. SO WE RENTED A WAREHOUSE FOR OUR TRUCKS AND WATER AND I WORKED THE OFFICE FROM
HER LOCATION / HER BUILDING / WERE I WORKED FOR 4 YRS.

WELL I DID TAKE MY SALARY IN 2010 , 2011 HOWEVER IN 2012 SHE STOPPED MAKING DEPOSITS INTO THE BUSINESS ACCOUNT SO THERE FOR I ONLY RECEIVED 5k IN 2012.

MY SALARY WAS 85k A YEAR WHEN I WAS WORKING FOR HER. NOW WHEN EVER THERE WAS A CHANGE TO THE PAYROLL DECREASE / INCREASE SHE HAD TO SIGN OFF ON IT . SHE NEVER SIGNED OFF ON ANYTHING FOR ME TO EITHER DECREASE OR INCREASE.

SO ME AND MY PARTNER OPENED A LLC IN MY SONS NAME BECAUSE WE BOTH OWED
PAYROLL TAXES AT THAT TIME .

WE OPENED IN 5/2010 AND HE LEFT IN 8/2011 STATING THAT HE HAD TO GO FIND
A JOB CAUSE WE WERE NOT MAKING ANY MONEY PLUS WE GOT INTO AN ARGUEMENT CAUSE HE DRINKS A LOT AND WAS ALWAYS LATE, OR TAKING THE DAY OFF, DID NOT WANT TO WORK ON SUNDAYS.

SO , I OFFERED IN 2011 TO BUY HIM OUT AND PAY HIM 1k A MONTH TILL IT REACHED 20k. THIS BUSINESS HAS NOT MADE ANY MONEY IN 3 YEARS , AND I AM STILL HERE.

I HAVE PUT ANOTHER 50k IN FROM ME AND MY HUSBANDS BANK ACCOUNT TO KEEP IT A FLOAT ..

THE LADY SAID WE COULD USE THE SPRING IN 3 YRS AND THAT 3 YRS WAS UP IN FEB 2013 AND I HAVE EMAILED HER AND SHE NOE JUST SAYS I DON'T OWN THE PROPERTY ME AND MY BROTHER DO AND I AM TRYING TO GET HIM TO GIVE IT TO ME FOR THE AIRPLANE SO SHE SAID THERE IS NOTHING THAT SHE CAN DO .. I SAID WELL YOU SAID YOU WERE COIMING AND I HAVE HUNG IN HERE THIS LONG AND , MY PARTNER AND MYSELF AND YOU ALL HAD A VERBAL AGREEMENT.. i TOLD HER THAT NOT ONLY HAVE A LANDED IN THE HOSPATIL ( WITH NO INS) FOR MY HEART , BUT I AM BROKE AND YOU HAVE NOT DONE WHAT YOU SAID YOU WERE GOING AND HAS ME A GREAT DEAL OF STRESS AND UNHAPPINESS AND ALMOST A DIVORCE ..

NOW, I WANT OUT THERE IS NO WAY I CAN KEEP THIS A FLOAT ANY MORE AND I WILL THOUSANDS AND THOUSANDS OF DOLLARS.

MY PARTNER ( WHO LEFT 2 YRS) NOW WANTS TO COME BACK AND TAKE IT OVER . WE DID BUY 4 TRUCKS WHEN WE STARTED FOR 12k 2 WORKED AND 2 DID NOT. WELL THE TWO THAT DID BROKE DOWN AFTER MY HUSBANDS WHO HAS NOTHING TO DO WITH THE BUSINESS GAVE ME ABOUT 10k TO FIX THESE TRUCKS IN THE 3 YEARS. I FIANLLY
JUNKED FOR 2700.00...... MY PARNTER IS ASKING WHY I SOLD THE ASSETS.

REMEMBER THIS IS IN MY SONS NAME AND I WANT NO HARM TO COME TO HIM .. i DID HOWEVER FILE THE TAXES AS A CROP . AND THE CPA FILLED THEM IN MY NAME .

PLEASE TELL WERE I STAND WITH HER AND NOW WITH HIM TELLING I CAN NOT JUST CLOSE THE DOORS... HE PUT IN 40k LEFT IN ONE YEAR I HAVE PUT IN 130 k FROM MY PAYROLL THAT SHE PAID ME IN 2.3 YEARS AND AT LEAST 70KOF MY OWN MONEY

HE ALSO ASKED ME TO GO TO AN ATTORNEY AND FILE A CIVIL SUIT AGAINST THE LADY WHO TOLD US TO DO ALL THIS , AND THEN JUST LEFT US DRY .. WELL ME AT LEAST.

I KNOW THIS IS A LOT TO TAKE IN , BUT I DO NEED SOME ANSWERS I AM SUPPOSED TO MEET MY PARTNER FOR LUNCH TOMORROW.. HE TOLD ME NOT TO CANCEL CAUSE HE NOT MESSING AROUND ANY MORE

WHAT A MESS ...

SORRY FOR THE MISS SPELLED WORDS , TRYING TO TYPE TO QUICK

THANKS
NATALIE

ALSO, I DO NOT WANT THIS POSTED ON THE INTERNET ...... THANKS
Submitted: 1 year ago.
Category: California Employment Law
Expert:  socrateaser replied 1 year ago.
Hello,

Although you have a lot of things going on here, from what you describe, you do not owe either the lady or your partner anything.

In the absence of a written agreement, partners are separately entitled to manage partnership assets, as long as they do so in the best interests of the partnership.

Similarly, a corporate officer's obligation is to act in the best interests of the corporation. This, does not, however, require that you work for free.

Concerning a lawsuit against the lady, there was apparently no promise of any specific amount of financial or other support -- it was just a speculative business venture that did not succeed. You won't be able to hold the lady liable for anything, either.

In short, your recourse, though it may be uncomfortable, is to: (1) dissolve the corporation, pay any remaining taxes, sell any assets, pay whatever you may owe to your creditors and close the doors; (2) sell all of the remaining partnership assets, divide them with your partner, pay any remaining taxes, and close the doors; (3) walk away safe in the knowledge that you don't owe anyone anything with regards XXXXX XXXXX venture, and start looking for a new means of earning a living.

It may seem that I'm trivilizing your circumstances -- but, I am actually taking the question quite seriously. There just isn't much to do, other than bring this chapter of your life to a close and move on.

If you need further clarification or have further questions, feel free to ask.

Hope this helps.

socrateaser, Lawyer
Satisfied Customers: 34665
Experience: Retired (mostly)
socrateaser and other California Employment Law Specialists are ready to help you
Customer: replied 1 year ago.
You are talking about a written agreement, however there was a written agreement between him and I. We did have My son write a note saying that this was our assets and that he was not to be held accountable or any liabilities.

So if understand you correctly, I don't have to t my partner take over.. I feel the remming assets should be sold and the remming 15k in a /r should be collected by the bills and be done.

And as for her, I guess although she said she would pay me my salary and did not revive it all in the last three years I should let that go as we'll??

And last question, a verbal agreement between 3 people would not hold up in court.. If I knew she was going to do this I would of just taken my money and got a new job and saved the 50k..

Thanks
Expert:  socrateaser replied 1 year ago.

Hello again. I'm still awake, so I'll address your follow-ups immediately:

You are talking about a written agreement, however there was a written agreement between him and I. We did have My son write a note saying that this was our assets and that he was not to be held accountable or any liabilities.

A: I would have to review the agreement, but as a practical matter, if you pay over any profits (if any exist), pay off the liabilities and distribute assets to the person who contributed them, then your partner is not going to sue. There would be little point, because by the time you are done, the only persons who will get any money will be your attorneys. You and your partner are each struggling to earn a living. You don't have the resources to sue each other -- right?

So if understand you correctly, I don't have to t my partner take over.. I feel the remming assets should be sold and the remming 15k in a /r should be collected by the bills and be done.

A: Depends on in whose name the assets are held. For a vehicle, if title is in your name, then you can sell it. Again, your partner is not going to sue you -- because the cost of the lawsuit is too expensive.

And as for her, I guess although she said she would pay me my salary and did not revive it all in the last three years I should let that go as we'll??

A: I can't tell you to "let it go." All I can say is that I don't see how you will be able to win this sort of claim in court. If it were only a few months since you were last paid, you would have a case. But, after three years, the implication is that you agreed to work in anticipation of profit, but without a salary, because no one would remain employed under such circumstances. The court would not likely buy into the claim that you anticipated being paid a salary throughout the last three years.

And last question, a verbal agreement between 3 people would not hold up in court.. If I knew she was going to do this I would of just taken my money and got a new job and saved the 50k.

A: An oral/verbal agreement is practically impossible to prove. Everyone will remember the deal differently. Again, I cannot tell you to let it go -- but, I can tell you that you could spend another $50K trying to prove your case in court, and you could lose, which would put you $100K out of pocket to the negative. I doubt that you would want to take that risk.

Your partner needs to realize that this enterprise is finished, and it's time to move on. If you can't come to an agreement to sell the assets, then offer to split the cost of a mediator and then contact the American Arbitration Association and hire a retired judge to tell you what's likely to happen if you end up in court. By the time the meeting is over, your partner will agree to let it go, sell the assets and move on.

 

Or, have your partner open up a Q&A session here at justanswer.com and ask me some questions about the situation. I'm just an objective voice, so I'll be happy to tell each of you the risks/costs of a legal action over the partnership.

Hope this helps.

Customer: replied 1 year ago.

ok ... we opened this Business in my SONS name !!!! Neither my name or my partners name is on the LLC . However we type up a paper saying


 


that my son is not responsible for any debt that the LLC has and that neither my partner or I will sell the assets with out each other knowing.


 


and that my son owned 0 % of the Business. However in 2010,2011, 2012 we filled the taxes as a corp and in my name.


 


i told my partner we have to opions .


1.) I buy him out for 10K and Give him a 2002 FORD F250 SUPPERCAB .


 


2.) I file a disilution of the business and he can keep all the assets and the customers and open his own LLC in his name .


 


Now he says how do I run route when you sold the trucks ... And says make him a fair deal or I am going to go to JAIL .

Expert:  socrateaser replied 1 year ago.
You could tell him that you think the two options you have offerred are each a fair deal, and that you have no idea what he's talking about with respect to your going to jail -- except that a threat of a law enforcement report as a means of leveraging a settlement in a civil matter, may be felony criminal extortion. So, he may want to consider just running the numbers and then try to agree on something that is actually fair.

Hope this helps.
Customer: replied 1 year ago.

Thank YOu ... Last thing . how does all this work if the LLC is in my Sons Name but the tax returns were filled in my name


 

Expert:  socrateaser replied 1 year ago.
I don't think it matters. IRS just wants its money -- it doesn't care who pays.

The issue for a court in a partnership dissolution is whether or not there was any fraud or fiduciary breach committed by you. You haven't tried to cheat your partner. It's just a business that failed due to market conditions.

Hope this helps.

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socrateaser
socrateaser
California Employment Lawyer
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Retired (mostly)