Legal Question in Investment Law in California

Possible securities fraud questions

I have an investment with a small private business. The owner directly offered me a ''profit sharing agreement'' which would pay out regardless of profit or loss on the business. I was never given financial statements etc. that were promised in the agreement and now it has come to light that they are broke (supposedly). I have been told by an attorney that this is actually a security and that the owner may have committed securities fraud and they may be held personally responsible. The owner has recently defaulted on the promissory note, claiming the business may claim bankruptcy. I've sent a demand letter from an attorney and am deciding what action to take.

Does it matter if I sue sooner rather than later if there are plans to file bankruptcy?

Is a person in my position allowed to sue for damages due to the business not paying?

Is something that an attorney would likely take on a contingency basis?


Asked on 1/28/08, 9:30 pm

1 Answer from Attorneys
Ryan P. McClure The Law Offices of Ryan P. McClure

Re: Possible securities fraud questions

Generally in these types of situations it is better to sue sooner than later. Whether an attorney is willing to take the case on contingency is dealt with differently be each attorney. The fact that they are "broke" or may not have any other assets may persuade an attorney to only take the case on a hourly basis.

Feel Free to contact me if you would like to pursue this matter.

Good Luck!

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construed to be formal legal advice nor the formation of a lawyer/client

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Answered on 2/06/08, 12:51 pm


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