Legal Question in Business Law in Colorado

Business partner wants to be bought out

My husband and his brother are both 50% shareholders in a (S)Corporation. Brother is demanding that my husband buy him out. He only wants to take paid off assets and receive monthly payment from corporation. My husband and his brother cannot agree on a net worth of the company as he is not realistic on values of equipment (excavating company). Additionally, it seems a bit unfair that husband is left with a little over $1 million in debts while brother walks away with $370,000 in pure assets with NO liability. All my husband would be left with is paper and promises (accounts receivables) and equipment that is barely worth what is owed on it. Are there any standards which would determine how much would be fair in a situation like this? Also, what is the likelihood that we would be forced to liquidate the company. We have 28 employees. This is our lifeblood and do not want to lose what we have. If we have to liquidate, chances are we will be upside down on values. The net worth of the business right now stands at $584,000. He has taken $140,000 in equipment and vehicles and is working for himself using corporate assets. Any advice would be greatly appreciated.


Asked on 8/02/04, 3:07 pm

1 Answer from Attorneys
Eric Fisher Law Office of Eric A. Fisher. LLC

Re: Business partner wants to be bought out

If your husband and brother cannot reach agreement on a fair buy out and they had no buy out agreement when they incorporated, they will have to either liquidate the company or seek help from the courts or a mediator. Absent a written agreement identifying particular pieces of equipment as belonging to the brother, he cannot just take corporate assets and start a new business. You should probably contact an attorney if you think the brother is overeaching or worse.

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Answered on 8/02/04, 3:37 pm


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