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Richard, Attorney
Category: Business Law
Satisfied Customers: 55715
Experience:  32 years of experience practicing law and a businessman.
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ABC Co - S Corp, A And C shareholders A has left company to

Customer Question

ABC Co - S Corp, A B And C shareholders
A has left company to work for vendor partner as an employee. ABC Co and vendor partner are under NDA. It is clear that B has supported the departure and remains allusive and is still in contact with A on non-disclosed sales opportunities. C believes A has stolen ABCs IP. A continues to sell this IP to ABCs customers using ABC resources/suppliers while employed under vendor partner. C is not ok with departure and believes A's actions are averse to the care for ABC and has violated fiduciary responsibility: A's actions further dilute sales, company value, creates an NDA violation with vendor partner..
What recourse can C independently exact successfully? Such as cease and desist? Toward B or vendor partner?
Submitted: 2 years ago.
Category: Business Law
Expert:  Richard replied 2 years ago.

Hi! My name is ***** ***** I look forward to helping you.

You do have recourse both from a criminal side and the civil side. On the criminal side, you can prosecute him for embezzlement, fraud, and theft. On this front you would want to contact the district attorney's office as the district attorney's office is where criminal prosecutions are pursued.

On the civil side, you have a cause of action for fraud, misappropriation of company assets, breach of fiduciary duty, breach of contract, as well as several other causes of action. Not only are you eligible for your actual monetary damages, but an injunction preventing any further such action, the fraud and misappropriation causes of action will entitle you not only to your actual damages, but punitive damages as well. You can also join any parties that are conspiring with A in A's improper actions.

To be honest with you, your best alternative here is to pursue this from the civil side. A criminal prosecution requires you to prove intent to not pay you from the beginning and a much higher burden of proof..."beyond a reasonable doubt" versus simply "preponderance of the evidence" on the civil side. And, even if you could get a prosecutor to pursue this, you would then find him likely spending any money he has to defend himself rather than paying you.

But, I would send him a letter by certified mail to A and any other parties with which he is taking such action informing them of the foregoing and demanding they cease and desist in any further such actions and pay you damages for past actions within a short specified period of time or you will have no choice but to pursue this against all involved parties from both the criminal and civil side. That should provide plenty of incentive to comply with your demands; but, if it does not, file your suit and/or contact the district attorney's office. . Even if you have to pursue this further to a suit and/or prosecution, that's likely all you will need do. In my experience, he will settle this quickly thereafter rather than risk punitive damages and possible criminal prosecution.

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