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  • Biz partner changed bank accounts

    Hello. I own a corporation 50/50 with a partner. We have a signed business agreement and have been operating successfully for three years. Recently a media network expressed interest in producing a piece on our business, and my partners ego has seemed to run amuck. He recently opened a new bank account in the company name with himself as the only signor (contrary to our partnership agreement) and is now depositing all funds into that account. I would prefer not to plunder everything, and I feel like he is testing my boundaries. What are my options? We have a signed agreement that we have been operating under, and he said that that means nothing to him. Do I have any recourse in getting access to the bank account? I hold over 300k in debt for company equipment and he is on his way to leaving me in the lurch.

  • #2
    Re: Biz partner changed bank accounts

    He cannot do that--Based on what you say here, you could file suit against him (or at least threaten to do so) in small claims court or in regular court; filing in small claims court is easier and requires no attorney...you could try to collect all of the costs and damages that you suffered due to his behavior... the lawyers could also intervene and warn him if need be.

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    • #3
      Re: Biz partner changed bank accounts

      My concern is that he will keep moving the money around. I am in a different state and have zero access to any of the money in the business bank account - and his reaction to most legal documents is to throw them in the trash. If he were to know I was pursuing him regarding this he would just take all the money and move it to another account. If I go to small claims court and get a judgement in my favor, what would the outcome be if he does not pay?

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      • #4
        Re: Biz partner changed bank accounts

        You could have an accountant examine and audit him. Or even force it to be done in a court proceeding if need be.

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        • #5
          Re: Biz partner changed bank accounts

          I have retained an attorney, who is now on vacation this week - so lets say I attach an accountant to this? Or get a court forced action? What is the result of that? Right now he is the only signor on the bank account and once this tips I am sure he'll drain the money out... what will suing him yield?

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          • #6
            Re: Biz partner changed bank accounts

            The court can follow any attempt to withdraw and order the funds back or punish the person withdrawing.

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            • #7
              Re: Biz partner changed bank accounts

              What is a typical punishment/punishment path? A petition is being drafted, there are ample records and two affadavits showing that over 100k in funds have been diverted by the individual for self serving purposes in a manner such that it was hidden and/or unknown to the equal business partner with a request that the funds be replaced immediately, with a few other remedies (control/assets to be turned over to other partner).

              I do not think the individual is going to give the money back despite a court order. What is recourse if there is a criminal penalty? If an arrest is made I am assuming this individual can make bail and get out... what can be done?

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              • #8
                Re: Biz partner changed bank accounts

                The court can require funds be set aside or a bond for possible damages etc.

                It is not easy to fight the court once the court takes control. Take some comfort in that fact.

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                • #9
                  Re: Biz partner changed bank accounts

                  So, after a hefty retainer court granted a lock on all bank accounts and granted me temp control of the business. Discovery yielded a huge amount of money (over 100k) taken through diversion of funds. One frustrating thing is my partner is laughing it all off, and my lawyers discourage me from filing a police report saying it may hurt our case. So, the result of my suing him so far is... he can't steal anymore. That seems to be it. Even though it is clearly demonstratable he diverted money ... he said he spent it all, has none of it... and doesn't seem to be too worried. I get the impression that for him to be forced to pay restitution it is going to take more money in legal fees than I might have. I had an idea that this being such a crazy crime there would be some penalty and things would be in my favor. My lawyers say he committed a crime... but don't want me to file a police report. I feel like there is going to be no favorable result regardless of what he has done. One of the recent payments was for over 15,000 to one of his family members... Am I just out of luck?

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                  • #10
                    Re: Biz partner changed bank accounts

                    If the lawyer really thinks the acts were a crime then he and you should file a police report without question--the culprit may try to argue it really is a business dispute.

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