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Hello, My sister and I are 50/50 partners in a Texas (legal

Hello, My sister and I are...
Hello,
My sister and I are 50/50 partners in a Texas (legal zoom type form) LLC. She has in effect asked me to leave. We do not have bi-laws or sell agreement (foolishly) but it is what it is. At this point, I'd like to know what the process is to 1. stop her from running the business into the ground or intentionally hiding/draining money. 2. what the process is to have her buy me out or me sell my stock to another party 3. sell everything off and divide up the profit/loss I'm the sole manager on the forms so it appears I have more control than she does. please help :)
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Answered in 7 minutes by:
9/12/2013
Roger
Roger, Attorney
Category: Business Law
Satisfied Customers: 31,875
Experience: BV Rated by Martindale-Hubbell; SuperLawyer rating by Thompson-Reuters
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Kirk Adams : Hi - my name is XXXXX XXXXX I'm a Business litigation attorney. Thanks for your question. I'll be glad to assist.
Customer:

hello

Kirk Adams : 1. There are a few different things you can do. You could file suit to liquidate the company and ask that a receivership be established to have an independent third party administer the business of the company in order to prevent waste or intentional acts to hurt the company.
Kirk Adams : You could also ask the court for a temporary restraining order to stop any disbursements, transfers, etc. without your approval or court approval.
Kirk Adams : 2. You cannot force her to buy you out, but you can force liquidation. This would be something that you could also do by filing suit as mentioned above.
Customer:

Sorry, the window where your text is coming through is very small. having to move to another part of the screen. let me read ..

Kirk Adams : 3. This would also be possible with the liquidation action. You can ask the court to allow your partner to either buy you out or liquidate all of the assets of the company, divide the proceeds and close the business.
Kirk Adams : From what you've said here, it appears that you're not wanting to continue the business, so a receivership isn't likely the best option.
Kirk Adams : Instead, the better option is likely to file a petition for a final accounting and to liquidate the company.
Kirk Adams : This would allow you to find out all of the assets of the company under the court's direction, determine the value of the company/your interest in the company, and then either sell out to your partner or liquidate altogether.
Customer:

Thanks for your help. My sister wants to keep the business going and b/c I didn't bring capital to the deal, she doesn't think I should have anything ... she just wants me to go away. So, I would prefer her to either buy me out, but I'm not sure how we'll come up with that figure and if she doesn't, then I want to threaten her with dismantling the corp. What is the 1st step in moving forward with this plan?

Kirk Adams : If you're 50/50 partners, then you own 1/2 of the business - - botXXXXX XXXXXne.
Kirk Adams : If there's a written agreement that whatever capital each of you invested becomes your basis in the property and that you're entitled to your basis before dividing the assets, then her capital investment may be due back to her BEFORE dividing the assets - - but that should have to be in a written agreement in order for the division to be done that way.
Kirk Adams : If you want her to buy you out, you may have to get an accountant to value the business if you can't come up with an agreed value; or if you can't get anywhere, you can always file for an accounting and to liquidate the company, and the valuation can be handled through the court.
Customer:

On a side note, I have access to our bank account and am monitoring. It appears she is not making the normal deposits into the account any more as if she opened up another account. We typically have a steady stream of revenues, which have all but stopped. I have to think this is illegal. Thanks for your help. One last question. So if I want to stop her in her tracks and force her to stop anything illegal or damaging to the business, what step should I take ? I know she doesn't want to kill the business, she really just wants me to go away. What is my next step to tell her she will either need to agree to buy me out or we'll start to dismantle the business?

Kirk Adams : The best way to get the ball rolling is to inform her that you're going to begin the liquidation process and have a valuation done. That should heighten her senses and get her attention.
Kirk Adams : If you want to stop her in her tracks, you can file a petition for an accounting, injunction and liquidation and ask for a temporary restraining order to be entered to stop her from conducting any activity with the business until an accounting occurs.
Kirk Adams : This will stop her ability to make any transfers, deposits, etc. until you get a handle on things.
Customer:

Does an attorney have to send a letter or the like to notify her about the liquidation process to stop the madness or (would it be advised?) or is this something I can do first? I'm just not sure I know the process to just tell her I'm going to start the process... I'll give you excellent service shortly - I really appreciate it.

Roger
Roger, Attorney
Category: Business Law
Satisfied Customers: 31,875
Experience: BV Rated by Martindale-Hubbell; SuperLawyer rating by Thompson-Reuters
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Hi Chris - I lost my connection momentarily.

IF you were my client, I would write a letter to the other member and inform her of your intent to liquidate. The letter would offer a peaceful liquidation or buyout if the other member is interested, and if not, then the letter would inform the member that a court petition will be filed to dissolve the company, request an accounting and have a TRO entered to prevent any waste from occurring during the dissolution process.

Thanks for allowing me to assist, and please let me know if you need anything further.
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Customer reply replied 4 years ago

Thanks again. Do you represent in Texas and if so, would you be able to tell me approximately the costs involved for this 1st step (the letter) and if no response, what the process would be to file a petition for injunction / costs for that? Just want to have my ducks in a row, as I plan on sending communication to her to let her know what I'm about to do.


 

I'm licensed to practice in Texas federal courts, but we're not allowed to take on clients through this site - - and you'd be in state court on something like this.

As for cost, it really just depends on how much of a fight your sister wants to put up. A letter from an attorney should cost less or right at $100; but the litigation - - if it comes to that could run from a few thousand dollars to more than ten - - just depends on how much fighting you end up doing.
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Roger
Roger
Roger, Attorney
Category: Business Law
Satisfied Customers: 31,875
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Experience: BV Rated by Martindale-Hubbell; SuperLawyer rating by Thompson-Reuters

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