What should I do about my 50/50 partner?
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What should I do about my 50/50 partner?
Hello,
I have a business that was established on 4/20/2017 called Greengo USA LLC. I
brought on an investor for 50 equity in the company. There has been only verbal
disagreements but only he has broken any laws associated with our Operating
Agreement. He has locked the business bank account as well as the warehouse with
our inventory and assets, which we have a written lease for, making it impossible
to carry out business. He has also taken money from the business account to pay
back the interest on a loan he pulled for his Capital Contribution. I don’t know
what my options are. Please assist where you can. It would be very much
appreciated.
Asked on August 28, 2017 under Business Law, New Mexico
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 7 years ago | Contributor
1) Sue him: you can sue for monetary compensation for his breach of fiduciary duty (the duty of loyalty owed by each member of an LLC to the other members and to the LLC itself) and for his evident theft or misappropriation of money belonging to another person (the LLC, which is a separate legal person from himself). You can seek return of all monies he took (and/or for any inventory or equipment he may have taken) and also compensation for any other costs or losses. In the lawsuit, you can also seek a court order requiring him to "unlock" the bank account and the warehouse; and you can file an "emergent" (think urgent or emergency) basis to get into court faster than the months it generally takes. Because filng for court orders is more complex than just seeking money compensation, and because emergent relief increases the procedural complexity further--and also because you will be suing in the LLC's name (for the harm done it) as well as your own, and LLCs *must* be represented by attorneys--you need to retain a lawyer to help you.
2) Some of what he done may be criminal: e.g. taking money from the LLC may be embezzlement. Speak to the police as well, though if you are going to hire an attorney as recommended, do so immediatley and talk to the lawyer first--if you are going to get an attorney, discuss actions with him before doing them.
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