Legal Question in Business Law in Georgia
My husband was a minority partner in a giftware company (30%). He and his partner had a major falling out. The majority partner was allowed (via the written contract which my husband foolishly allowed to be 'reviewed' by his partner's attorney) to force my husband out of active participation in the business. He was still entitled to 30% of any profit at some point (none of which he was ever given). Instead, after a year, the partner stopped doing business under the previous name, changed the name of the business and then continued to conduct the exact same business under this new name. Selling the same items, attending the same trade shows, serving the same channels. My husband was informed that there was 'no profit' from the old business and that was the end for him. My question is: Is this legal and does my husband have any legal standing with the new company? It seems quite unfair that we have been cheated out of his partnership this way and he is deeply pained by this.
3 Answers from Attorneys
Youa re asking about business documents, perhaps significant assets, and other matters that no one here can possible know anything about. Your husband needed his own attorney for every step since formation, and certainly in the process of exiting the business. That is who can address the issues based on all facts and documents. The issues surrounding the transfer of assets to a new company are certainly time sensitive.
As a Franchise Attorney I entirely agreed with the other attorney answer. No attorney here on LawGuru can begin to even formulate an answer without examining all documents as well as considering all surrounding facts and circumstances. Consult with a good business or franchise attorney in your area for a review of the documents and for specific advice after the review.
Mr. Franchise - Kevin B. Murphy, B.S., M.B.A., J.D.
Franchise Foundations, a Professional Corporation
It depends on a number of factors, the primary ones being the terms of the documents your husband signed and the facts regarding the profitability of the old company and whether the new company was funded improperly with the assets of the old company. You will need a business attorney to review the documents and discuss the situation with your husband.
If you would like to discuss any issues further, please feel free to contact my office. The link to my contact information is below. Thank you.
The foregoing is general information only, not specific legal advice. No attorney/client relation has been created or should be implied.
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