If abusiness partner has stolen funds from our account, how do I proceed with recovering them?

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If abusiness partner has stolen funds from our account, how do I proceed with recovering them?

Opened an LLC Partnership. It was not going well so mutually decided to dissolve it. Paper work submitted to state to make legal changes. In meantime, partner obtained most recent invoice payment and cashed it. I can prove with time sheets that all funds were earned by myself. How do I recover with least amount of inconvenience?

Asked on April 16, 2011 under Business Law, Washington

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

The only way to recover would be for the LLC--the entity which had the right to the invoice payment--to sue the partner for misappropriate of funds; once the LLC has the funds, they can be paid or distributed as would be appropriate under the LLC agreement, per employment contract, etc. The problem is, even if you did the work, if the check was to be paid to the LLC (e.g. billed by LLC), it is the LLC and not you directly which has the right to seek recovery.

If the check was to be paid to you (e.g. made out to you; billed by you directly; or the LLC agreement or employment or other contracts specified that a payment like this would go to you directly) then you would have the right to proceed in your own name.


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