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: Business Law
Satisfied Customers: 4430
Experience:  Internationational Commercial Attorney
17219180
Type Your Business Law Question Here...
TexLaw is online now
A new question is answered every 9 seconds

Hi, I own a recruiting company and it is an S corp. I

This answer was rated:

Hi,
I own a recruiting company and it is an S corp.

I took 30,000 out of my personal 401k and went into partnership with someone buying gas royalties.

He formed an llc in one of his friends name and he is registered as the president. I am not a manager or a member listed with the state if this llc. I am the CFO of this llc and VP of this llc or atleast that is the way i sign documents.

He and i have a partnership agreement. He is 51% and I am 49%

His x employer has sent him a letter that he did do act in the best interest of the company while employed with them and they say that he has some of their information. He had no non compete, no handbook and no contract with the company. They want money from him and they want the minerals that we have purchased with the money that I invested into the company personally-24,000$ and my recruiting company invested around $6,000.
The llc he formed is what we do all of our financial transactions out of. We have not paid ourselves or used any of the money personally. It has all been for purchasing minerals and for advertising.
We formed another llc in my name that we park the minerals in that we want to keep. In the mineral acquisition business we are required to sell some and keep some.

Anyway his x employer wants the minerals from the llc that I have ,only in my name.
They sent him a letter directly and requested he pay them a certain amount of money and give them all of the minerals.
I use the office address that i have the recruiting company at as a place to get mail and that is where the second llc is registered to. If they sue him and the llc's are they able to drag my recruiting company into it and are they able to sue me personally?
Hi,

Thank you for your question.

Your partner's ex-employer may have a case. If your partner used confidential information that he gained through working under his ex-employer, then this could violate the ex-employer's rights to their trade secrets. Nevertheless, there is an argument that this information was not protected because there was no duty owed by your partner since there was no confidentiality or non-disclosure agreement. Nevertheless, this would most likely be an issue which a jury would have to decide in the end.

The separate LLC where the minerals are that you own could be sued and brought into a lawsuit under a theory of conspiracy to misappropriate trade secrets. You could also be sued for this personally as well, as the claim sounds in tort and thus can be asserted against you for your personal tortious behavior (if any is proven).

If the recruiting company LLC is separate from the LLC where the minerals rights are held, then this LLC will not be subject to the lawsuit.

Please let me know if you have any further questions. Please also kindly consider rating my answer positively so that I am compensated by the website for my work on your question. Rating positively does not cause an additional charge and does not prevent us from further discussing your questions.

Best Regards,
ZDN
Customer: replied 4 years ago.


If they did sue the llc where the mineral rights are held and sued me personally can I file chapter 13 bankruptcy if the law suit is too big to avoid paying it?


Also, what if I deed all the minerals to his llc and leave nothing in my llc and shut it down?

Thank you for your response.

You can in fact declare bankruptcy and this would stop the lawsuit against you.

You can also deed the mineral rights back to his LLC. If you did this, then your LLC would no longer be liable to suit because it would have no remaining connection.
TexLaw and other Business Law Specialists are ready to help you