Legal Question in Business Law in California

Re: Business Dispute

You may have a claim against Mr. X and the company based upon fraud or misrepresentation in addition to a breach of contract claim. We would have to review all of your documents to provide you with specific advice. Our firm handles cases throughout California.

Re: Business Dispute

The way you have stated your post, it seems more of a statement that you want to sue than a question about the fact pattern. Mr. Rothman has taken the negative tone, warning that lawsuits are expensive and can take on a life of their own. Mr. Stone has given you what amounts to an invitation to call him and he is local to your area. So, it seems that I can add in two areas: (1) Lawsuits are expensive, but there are alternatives. An attorney will evaluate whether you have a right to push for arbitration and most courts now require an attempt at ADR (Alternative Dispute Resolution) usually in the form of mediation. Those are definitely paths you should consider pursuing. (2) My general advice for someone seeking to retain an attorney is to contact several. Local attorneys are less expensive in terms of travel but may have high rates in your area. If you are going for the litigation route, you are looking at a potentially long term relationship with a professional and so you need to find someone that you're really comfortable with in terms of feeling heard, their recommendations to you, and their general personal/practice personality. Many attorneys will offer low cost first meetings and you will get a feel for their proposed approach to your case and what retainer would be required up front. It sounds like you have a situation that you can't ignore and so the question is what is the best strategy for getting you out and meeting your goals for recovery. An attorney would need a full interview with you and a review of the documents to make a recommendation in this regard. Best wishes! - Cathy

Re: Business Dispute

Yes, your alleged facts sound like the grounds for a suit. Such suits are brought all the time when people misrepresent themselves and defraud investors. To win any lawsuit, you will have to be able to prove the claims you make. Feel free to contact me if serious about discussing the evidence, issues, risks and rewards of such suit.

Re: Business Dispute

In addition to the grounds for suit mentioned in the prior responses, the facts clearly show a breach of fiduciary duty and constructive fraud.

I would expect to find about a half dozen other instances of mismanagement and malfeasance which could serve as the basis for individual or derivative causes of action against Mr. X. For example, did the corporation hold annual meetings of shareholders? Did it have at least three directors? Did Mr. X lend corporate funds to himself?

I'd also throw my hat in the ring as a candidate to represent you; I have other clients in your area and also have a very similar minority-shareholder rights case under way in a court up north. Contact me directly for a proposal for economical and effective representation.

Re: Business Dispute

There's no free lunch. You want to start a big shaggy dog of a lawsuit, it's going to cost you big attorney fees up front not to mention investigation, deposition, and expert witness expenses. All of this presupposes that if you win the lawsuit there will be a way to enforce judgment against Mr. X's money or property, if he has any. Maybe if your company has directors and officers errors and omissions insurance you would have at least a possibility of recovering at the end of the case, although don't think for a minute this would get you off the hook as far as having to pay your massive up front attorney fees.