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.
- 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.