How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask TexLaw Your Own Question

TexLaw
TexLaw, Attorney
Category: Legal
Satisfied Customers: 4164
Experience:  Lead trial/International commercial attorney licensed 11 yrs
17219180
Type Your Legal Question Here...
TexLaw is online now
A new question is answered every 9 seconds

Hi my I own a revcovery center for young men in los angeles.

Resolved Question:

Hi my I own a revcovery center for young men in los angeles. My business partner has been taking way more than his share for the last year or so, and putting thousands of dollars on the business card for personal expenses. I have called him on this many times but he always says he wont do it anymore, then does. When I finally put my foot down he turned on me and says that he doesnt want to be in business with me anymore even though I bankrolled the business and the business has never paid me back. We do have a llc partnership so he cant get rid of me. However I strongly suspect that he is now outright stealing money. We sometimes take clients for free when there is a need (our normal charge is 3500 a month) and he is not telling me we have 4 free (scholarships) in the house out of 12 total slots. All of a sudden hes not taking money out of the business account and seems to have money all the time. I dont deal with the parents so I dont know what arrangements he may have made with them. In other words I suspect he is telling them to make the checks out to him and pocketing them instead of depositing them in the business account. Then telling me they arent paying anything. Its probably about 6000 a month hes stealing. I have not called the parents myself yet because I dont want to tip my hand. There are many other issues, such as he has made about 300,000 dollars in the last three years and he throws his letters from the IRS away (certified letters). Hes probably on pills or something. And there is no reasoning with him. He is completely illogical. Who can I talk to. Sincerely, XXXXX XXXXX
Submitted: 3 years ago.
Category: Legal
Expert:  TexLaw replied 3 years ago.

Zachary D. Norris :

Hi

Zachary D. Norris :

I'm reading through your question

Zachary D. Norris :

Ok. You've got quite a serious problem on your hands.

Zachary D. Norris :

You say you have an LLC partnership

Zachary D. Norris :

Do you have an sort of written and signed operating agreement?

Expert:  TexLaw replied 3 years ago.
What Happens Now?

Your chat has ended, but you can still work with your Expert to get an answer to your question if you have not yet received one.

Come back to this page at any time to see additional information from your Expert.  You will also receive an email when your question is updated.  If you want to send a message to your Expert, use the box below.

If you have already received a satisfactory answer to your question, click the Accept button above.  Experts are credited for each accepted answer they provide.
Customer: replied 3 years ago.
for some reason the chat is not coming through but I see the transcript of what you wrote. we have a generic llc partnership from legal zoom very not specific.
Customer: replied 3 years ago.
is there anyway to reach you oth
er than this chat window? Thanks.
Expert:  TexLaw replied 3 years ago.
I just sent you a lengthy response. Take a look at it and reply back if you want any clarification.

Thanks,
Zachary D. Norris
Customer: replied 3 years ago.

Mr. Norris thank you this is all I received back is there more to it and im not receiving it?

thanks robert. I guess botXXXXX XXXXXne is I need an attorney but there are thousands here in los angeles any idea where to start, looking for an attorney that is. And for the time being should I not say anything about my suspicions? thanks.

Zachary D. Norris :

Hi

Zachary D. Norris :

I'm reading through your question

Zachary D. Norris :

Ok. You've got quite a serious problem on your hands.

Zachary D. Norris :

You say you have an LLC partnership

Zachary D. Norris :

Do you have an sort of written and signed operating agreement?

Expert:  TexLaw replied 3 years ago.
Mr. Booth,

I apologize for the inconvenience. It seems the JustAnswer computer system failed to register my last response. I will answer again:

In short, your partner is breaking the law. I'm not sure what the terms are in the Legal Zoom form. However, I'm sure that he's breached the agreement. You can sue him for the following:

1) Breach of contract - he is not honoring the terms of the agreement between you two on profit sharing.

2) Breach of fiduciary duty - as a partner/member of an LLC, you owe each other a fiduciary duty. He is breaching this by stealing money from the company, stealing clients from the company, lying to you, etc.

3) Embezzlement - Embezzlement is the fraudulent appropriation of property by a person to whom it has been entrusted and the gist of the offense is the appropriation to one’s own use of property delivered to him for devotion to a specified purposed other than his own enjoyment of it.” People v Hodges, 315 P.2d 38 (1957).

“Essential elements of “embezzlement” are fiduciary relationship arising where one entrusts property to another and fraudulent appropriation of that property by the latter.” People v Darling, 41 Cal. Rptr. 219 (1964).

4) Fraud - he is misrepresenting personal expenses as company expenses on the credit card.

5) Conversion of company property to personal use

6) Tortious interference with a contract and with potential contracts - this is for stealing clients.

I think you are exactly right. You need to immediately retain counsel. You need to file an injunction so that you can stop this guy from doing further damage. You need to seek restitution damages for unjust enrichment on any profits he has made and for return of the money he has wrongfully taken from the company (in lieu of damages). This is important because you mentioned that the IRS is sending him communications which he is ignoring. This means you want to assert a constructive trust over the assets he has that should belong to the company so that you have priority to them over other creditors.

You need to gather all the company records you can find, including P&L statements, bank statements, credit card statements, emails, client lists, accounting documents, etc. These are vital and will help you in the beginning of the case.

As far as giving you a recommendation on attorneys in California, I don't know any that I could recommend. However, you need to retain someone who specializes in business disputes. The type of lawyer to find depends on the amount of money you want to spend. You can go with a big shop like O'Melveny & Myers LLP or Latham & Watkins, or you can go with more of a small boutique firm. Doing a google search or looking on Martindale Hubble for a list of firms specializing in business litigation.

Please let me know if I can be of any more assistance.
TexLaw, Attorney
Category: Legal
Satisfied Customers: 4164
Experience: Lead trial/International commercial attorney licensed 11 yrs
TexLaw and 6 other Legal Specialists are ready to help you

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises! Gary B. Edmond, OK
< Last | Next >
  • Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises! Gary B. Edmond, OK
  • My Expert was fast and seemed to have the answer to my taser question at the tips of her fingers. Communication was excellent. I left feeling confident in her answer. Eric Redwood City, CA
  • I am very pleased with JustAnswer as a place to go for divorce or criminal law knowledge and insight. Michael Wichita, KS
  • PaulMJD helped me with questions I had regarding an urgent legal matter. His answers were excellent. Three H. Houston, TX
  • Anne was extremely helpful. Her information put me in the right direction for action that kept me legal, possible saving me a ton of money in the future. Thank you again, Anne!! Elaine Atlanta, GA
  • It worked great. I had the facts and I presented them to my ex-landlord and she folded and returned my deposit. The 50 bucks I spent with you solved my problem. Tony Apopka, FL
  • Not only did he answer my Michigan divorce question but was also able to help me out with it, too. I have since won my legal case on this matter and thank you so much for it. Lee Michigan
 
 
 

Meet The Experts:

 
 
 
  • Tina

    Lawyer

    Satisfied Customers:

    8436
    JD, BBA Over 25 years legal and business experience.
< Last | Next >
  • http://ww2.justanswer.com/uploads/MU/multistatelaw/2011-11-27_173951_Tinaglamourshotworkglow102011.64x64.jpg Tina's Avatar

    Tina

    Lawyer

    Satisfied Customers:

    8436
    JD, BBA Over 25 years legal and business experience.
  • http://ww2.justanswer.com/uploads/RA/ratioscripta/2012-6-13_2955_foto3.64x64.jpg Ely's Avatar

    Ely

    Counselor at Law

    Satisfied Customers:

    19941
    Private practice with focus on family, criminal, PI, consumer protection, and business consultation.
  • http://ww2.justanswer.com/uploads/FL/FLAandNYLawyer/2012-1-27_14349_3Fotolia25855429M.64x64.jpg FiveStarLaw's Avatar

    FiveStarLaw

    Attorney

    Satisfied Customers:

    8189
    25 years of experience helping people like you.
  • http://ww2.justanswer.com/uploads/jespoag/2008-12-17_222355_jessepic.jpg JPEsq's Avatar

    JPEsq

    Attorney

    Satisfied Customers:

    2132
    Experience as general attorney, in house counsel, SSDI, Family Law attorney, and law professor
  • http://ww2.justanswer.com/uploads/gsenmartin/2008-04-22_214950_me1.jpg Guillermo J. Senmartin, Esq.'s Avatar

    Guillermo J. Senmartin, Esq.

    Attorney

    Satisfied Customers:

    110
    7+ years of experience handling various legal matters.
  • http://ww2.justanswer.com/uploads/PA/PaulmoJD/2013-10-10_195858_JAImage.64x64.jpg Law Educator, Esq.'s Avatar

    Law Educator, Esq.

    Attorney

    Satisfied Customers:

    31621
    JA Mentor -Attorney Labor/employment, corporate, sports law, admiralty/maritime and civil rights law
  • http://ww2.justanswer.com/uploads/dkaplun/2009-05-17_173121_headshot_1_2.jpg Dimitry K., Esq.'s Avatar

    Dimitry K., Esq.

    Attorney

    Satisfied Customers:

    15975
    Multiple jurisdictions, specialize in business/contract disputes, estate creation and administration.