Legal Question in Business Law in California

Re: ''Founders Rights''

It is difficult to give a good, complete answer with only the limited information that you provided. However, it sounds as though you formed a partnership with these two other people. Then, your partners have breached the partnership agreement and misappropriated nearly all partnership assets for their own uses. Does that fairly sum up what you have stated?

If so, then it is likely that you will have rights against your miscreant partners. You realize, of course, that the contents of any agreements that you signed are vitally important and likely to be controlling. Thus, any opinion stated herein is preliminary and without the opportunity to review the documents.

I would be happy to discuss this matter with you.

J. Caleb Donner 805-494-6557

www.donnerlaw.com

The LEGAL WARRIORS!

Re: ''Founders Rights''

Whatever rights and remedies you have maybe defined and limited by the contract language. The only way anybody can really advise you is for you to let them read the contract first.

Re: ''Founders Rights''

Whenever two or more persons join together to do business for profit, with an understanding that the profits will be divided in some way or another between them, a partnership is formed. It does not matter whether there is a written agreement, an oral agreement, or simply actions showing that a partnership existed.

When, as here, a dispute arises among the partners, courts will apply substantially the same case and statutory law to fashioning a remedy for the dispute. The main difference is that the court (or jury) faces a more difficult task in deciding just what agreements the partnership was operating under.

This fact-finding difficulty does not detract one iota from the fiduciary duties your (former) partners owed you.

One aspect of fiduciary responsibility is that partners cannot take advantage of one another's temporary infirmity. While I have no idea what the contracts you signed were all about, if your damages are related to signing while not fully competent, and the partners knew or should have known this, you may have a basis to set aside the contracts (at least in part) or for damages for fraud. It would be necessary for a lawyer to review the documents and all the surrounding circumstances and subsequent events in detail to advise you with certainty.