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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Business Law
Satisfied Customers: 118676
Experience:  All corporate law, including non-profits and charitable fraternal organizations.
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We are 3 members of family as shareholders of a NY

Customer Question

We are 3 members of family as shareholders of a NY corporation for purposes of managing and owning a 5 storey NYC commercial building purchased in 1994. My dad owns 60%, and brother and I own 20% each.
We permitted my brother to act as the building manager from the start and over the years due to family disputes and his personal disputes with my father, his wife has brainwashed him to claim the property as 100%. He has been filing the tax returns for the last few years where he showed himself as the sole shareholder. He also misappropriated the rents to another corporation which he owns, does not pay any of the property taxes, and does not communicate or share any information with the other family shareholders. The property will soon be listed for a tax lien due to the unpaid tax bills. We have been unsuccessful in resolving this dispute amicably for the last 10 years and therefore have decided to proceed with a complaint in court.
In the event when a Civil court receives our case and find out that this case appears to be of criminal nature for the reason of fraud, misappropriation of funds, stealing company funds and moving to another corporation. In such circumstances how will a judge react to this situation? as this is a family dispute my dad does not what his son in jail.
Submitted: 1 year ago.
Category: Business Law
Expert:  Law Educator, Esq. replied 1 year ago.

Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.

It is up to the Corp and members as to whether or not to pursue criminal charges. So even though in court some criminal allegations may come up, the DA will not prosecute without the Corp who is the victim agreeing to do so. All members of the Corp are liable though on any civil claims or tax claims, even if he kept claiming he was sole owner. So you and the other Corp members may end up liable to pay for his actions but you do not have to pursue this as criminal charges and as a victim that is the right of the corporation to not pursue criminal charges.