Legal Question in Business Law in California

Need Rep.asap- Corp. extortion by partner

My Estranged Husband and I are 50/50 owners in S Corp. He is Pres/Tres. I am VP/Sec. He was arrested 3 weeks ago for Dom.Violence against me and a protective order is in place.He also has drug charges pend. Immed. after he rcvd. order, he emailed me and gave me a handwritten letter thru a 3rd. party stating that if I didn't resign as board member of corp. and give him checkbook, etc. he would resign and/or otherwise force the corp. into bankruptcy thus leaving me and our kids penniless. I did not respond to his threats. On 10/28, I tried to dep. payroll into corp.ckg.act and bank said act. was closed by him and they had minutes of corp. meeting from earlier that day, stating that I was removed from board, a new sec/VP was in place but I am still shareholder. New Corp. checking act. opened but my name is not on it. I need to get access to funds TODAY but payroll ck. is in corp. name. I also want to know if he can legally remove me from board? I own half corp. shares he owns other half. Could this ''new VP/Sec.'' be a board member but NOT have any shares? If not,that would mean that I'm now majority shareholder because he would have to sell one of his shares. NEED BIZ/FAMILY LAW REPRESENTATION IN SLO COUNTY BY 10-31-05!

Thank you


Asked on 10/30/05, 12:20 pm

3 Answers from Attorneys
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Re: Need Rep.asap- Corp. extortion by partner

A director need not be a shareholder unless the bylaws so require.

Ordinarily, directors cannot be removed prior to the end of their term. See Corporations Code section 303. Also, the actions he has taken without notice to you and without your approval are invalid and fraudulent.

Your husband is also violating Family Code provisions requiring spouses to conduct the business aspects of their marital relationship openly and in the highest good faith.

I would say your situation calls for a temporary restraining order - not the domestic violence kind, which is relatively easy to get, but the old-fashioned all-purpose provisional remedy kind used for pre-trial relief in civil actions generally.

If the corporation has sufficient funds to meet the payroll, let's hope this jerk is bright enough to pay the employees rather than put the business in jeopardy. If 10/31 is the payroll date, I think that's your best hope, since finding a lawyer, getting a judge to issue a TRO, then serving and carrying out the order in time would be near impossible.

I doubt that I could assist you effectively, since I'm about 300 miles away. Some legal matters can be handled by "remote control," but your issues will require in-person visits to the court house, etc. that can't be handled from afar in an acceptable time-frame.

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Answered on 10/30/05, 3:53 pm
Michael Olden Law Offices of Michael A. Olden

Re: Need Rep.asap- Corp. extortion by partner

bryan is so thourough and love to read his answers -- what he is trying to tell you is you need to hire a expert famiy law attorney who is also expert in corp./business so your no goodnick husband cannot do an further damage to you and the kids now, yesterday and tomorrow -- all is not dark out, eventhough daylight savings time is now over -- get good local counsel and give him/her all the facts, answer the questions which seem never ending as acturally as possible, have copies of the tax returns of the corp as well as personal for the last 3-5 years and take his/her advice and protect the kids future as well as you -- good luck

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Answered on 10/30/05, 6:14 pm
Donald Holben Donald R. Holben & Associates, APC

Re: Need Rep.asap- Corp. extortion by partner

We are in midst of another like matter. Immediate action needed, but the earlier you act, the better in order to protect the company, assets, etc. Call to discuss if you wish.

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Answered on 10/31/05, 4:39 pm


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