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Lucy, Esq.
Lucy, Esq., Attorney
Category: Legal
Satisfied Customers: 23619
Experience:  Lawyer
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I have a partner who invested $150,000 in my small, retail

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I have a partner who invested $150,000 in my small, retail (outdoor goods) and travel-agency (fishing trips) business in Texas. Per our agreement, his investment entitles him to 40% of the company's income. However, one of his duties is bookkeeping, and I just uncovered evidence that he has been stealing from the company through an elaborate, false accounting scheme that has enabled him to siphon off funds for his personal use. My primary objective is to dissolve the partnership, paying him as little as possible of his investment. What is the best course to take? Many thanks.
Submitted: 2 years ago.
Category: Legal
Expert:  Lucy, Esq. replied 2 years ago.

My name is XXXXX XXXXX I'd be happy to answer your questions today. I'm sorry to hear about your situation.

There are a few courses of action that can be taken. First, you can file a police report - he is embezzling, and that is illegal. He could go to jail. If he is prosecuted, he could be ordered to repay the monies taken.

The second option is to sue him for any monies taken in excess of the 40% he is entitled to. Once that's done, dissolve the company and pay him nothing, since he already took it. You can also ask him to sign something stating that he will not seek any money as part of the dissolution in exchange for you not suing him/pressing charges for the money that he took. He might be willing to agree to that, and you wouldn't have to pay him anything else.

If you just dissolve the company without mentioning the embezzlement, he can sue for his 40% of the profits. If you don't have evidence that he was stealing (or if he manages to hide/destroy it before you get to court), then you could be ordered to pay him everything. So, it may be better to try to negotiate a deal with him where he waives his 40%. If you would like to continue to operate the company yourself, another option would be to have him sign an agreement stating that you are buying out his interest in the partnership, in exchange for monies already received.

You may want to consider having a lawyer negotiate/draft the agreement on your behalf, to make sure that you are 100% covered. A good place to find someone is

If you have any questions at all about what I've written, please reply so that I may address them. It's important to me that you are 100% satisfied with the service I provide. Otherwise, please rate my service positively so that I get credit for helping you today. Thank you.
Customer: replied 2 years ago.

Many thanks for your prompt reply, Lucy. As I would like to dissolve the partnership as expeditiously as possible, I am thinking about offering him his principle investment, minus the funds that he stole, minus a certain sum of money for the inconvience he has caused. Such an arrangement would enable me to avoid any kind of legal proceedings (criminal or civil) and to focus on my business, as I have recently been presented with some very attractive possibilities for growing it. I appreciate that I must eventually raise this question with my attorney, but I would appreciate your opinion of this proposal as well. Many thanks.

Expert:  Lucy, Esq. replied 2 years ago.
Yes, you can do that. The important thing is to have the agreement in writing, and to say that it replaces the prior partnership agreement. Also, if you think he might come back later and claim that you forged his signature, get it notarized when he signs it.
Lucy, Esq., Attorney
Category: Legal
Satisfied Customers: 23619
Experience: Lawyer
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