Legal Question in Business Law in California

how to file lawsuit against corporation

The Corporation had three shareholder member with 33 1/3 shares each. The BOD were the same three officers. I was requested to resign as the Treasurer by the President and Secretary and told it would be a share buyout in writing. I have not been paid for my shares. Also I have not paid as agreed, my salary/wages per oral/written agreement since 2006.


Asked on 7/13/08, 11:38 pm

3 Answers from Attorneys

Michael Stone Law Offices of Michael B. Stone Toll Free 1-855-USE-MIKE

Re: how to file lawsuit against corporation

You must be independently wealthy or very patient to have waited since 2006 for your paycheck. So far you have taken the situation laying down. Filing and winning a lawsuit is beyond your capabilities. Have you tried calling a lawyer?

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Answered on 7/14/08, 12:17 am
Terry A. Nelson Nelson & Lawless

Re: how to file lawsuit against corporation

If you can't resolve it through negotiation, then your recourse is a lawsuit. Keep in mind there are time limits on such actions. HOW to file is by employing an attorney experienced in such matters, rather than you thinking you can compete in the court system 'pro per' against experienced attorneys hired by the defendants to defeat your claims. If he agrees the case has merit and value, you should be able to work out an acceptable retainer agreement. Feel free to contact me if serious about doing so, if the case is in SoCal courts.

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Answered on 7/14/08, 1:45 pm
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Re: how to file lawsuit against corporation

I can think of several very valid reasons for delaying legal action for unpaid salary and enforcement of a buy-out, including the possibility of an out-of-court settlement or the fact that the corporation was at the time broke and apparently worthless.

However, if a suit is ever to be brought, perhaps the time is now, especially if some or all of your case rests on an oral agreement, since the statute of limitations for suits based on breach of an oral contract is two years from the date of breach. Factors in deciding whether to sue might include the strength of your case, the ability of the defendant(s) to respond in damages (pay a judgment), the possibility of a damaging cross-complaint, whether there is an agreement with an attorney fee clause or arbitration clause, whether filing suit could prompt an out-of-court settlement, and so on.

Here, your unpaid salary claim is rather distinct in nature from your share-repurchase agreement claim. Both can be handled in the same suit, and both are inherently breach of contract in nature, but the facts, allegations, defendants and defenses may be different. The corporation alone may be liable on one, but the individual shareholders on the other.

There may also be a derivative action lurking in the facts, or minority shareholder rights against insider looting and mismanagement.

I have a couple somewhat similar cases currently, and would be pleased to work directly with you on a further analysis of your possible case.

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Answered on 7/14/08, 2:08 pm


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