Legal Question in Administrative Law in California

Since you want the $50,000 plus interest back, you can not sue in Small Claims Court as it has a maximum recovery of $7,500. It would cost $365 to sue in Superior Court and would take at least 6 months to get a judgment unless they fully co-operated, which they will not, so filing a lawsuit would only work to the extent of showing that you are serious. Your Note with them might have a clause for attorney fees and recovery of all costs.

You need to, if you have not already done so, check on the internet and with the Better Business Bureau as to the company. A single letter from an attorney may get them moving; the attorney would need to review the Note, any other papers as to the obligation and your agreement with them, and any communications with them. To do that and write a nasty letter to them might take about 2 hours, which would be $500-600 [I charge $100 per hour so I would be less]. Before hiring an attorney, you could make one last threatening letter to them that you are going to turn the matter over to your attorney and report them to the appropriate governmental agency.

Do the terms of the note allow you to demand that the principal be paid to you at any time, including before the maturity date? Perhaps the makers were willing, but not obliged, to repay your $50,000 before June. That would be more usual with a straight note, I'd think. You should follow Mr. Shers' advice to check the company's liquidity and reputation. I assume the note is not secured by anything. Then, if the credit worthiness is there, wait until June 2011 when the note is due, and if it remains unpaid, then the makers are in default and you have a cause of action and can sue in Superior Court. I hoe you checked out the borrowers' credit worthiness before lending the money.

I would have an attorney review the note, and then write a demand letter for you. If the company does not comply, the attorney could help you sue in court for a judgment. I do securities litigation. I have also faced similar situations, where I have sent a demand letter and it resulted in payment to my client by the company shortly thereafter. Because of my experience litigating promissory notes and other investments, I may have some better insight into the specific laws in this area than most attorneys, and I know how to push the other side. I am happy to help, if you want to send me an email with your contact info.

Best,

Daniel Bakondi, Esq.

[email protected]

415-450-0424

The Law Office of Daniel Bakondi, APLC

870 Market Street, Suite 1161

San Francisco CA 94102

http://www.danielbakondi.com

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