Legal Question in Business Law in Colorado

My husband, his brother and his father all own a business corporation and are each 33.3% owners in the business. A year ago, the brother walked away from the business and all of it's responsiblities because "he wanted to do something else". The brother now doesn't feel obligated to be responsible to the business or to his 33.3% of the business debt. Can my husband and his father sue the brother for abandonment of the corporation so he has to be held responsible for the burden that he has left my husband and father-in-law with?


Asked on 2/28/11, 1:34 pm

2 Answers from Attorneys
Gary C. Johnson Attorney Gary C. Johnson

That depends on how the corporation is set up. For example, is there an Employment Agreement with the brother? A Management Agreement? A Buy-Sell Agreement? Any insurance coverage? Does the brother want out, and if so is he willing to negotiate an agreement? I have more questions than answers for you right now.

DISCLAIMER This answer is for informational purposes only and discusses general legal principles, trends, and considerations and is not intended as specific legal advice regarding your question. This answer does not establish an attorney client relationship. http://www.garycjohnsonlaw.com 720-323-3776 [email protected]

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Answered on 2/28/11, 1:42 pm
Kevin B. Murphy Franchise Foundations, APC

As a Franchise Attorney I basically agree with the other attorney answer. Ownership in a corporation does not usually entail obligations for business debt. However, there may be agreements in place that produce another result. Consult with a good business or franchise attorney in your area for specific advice.

Mr. Franchise - Kevin B. Murphy, B.S., M.B.A., J.D.

Franchise Foundations, a Professional Corporation

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Answered on 2/28/11, 5:50 pm


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