Legal Question in Business Law in New Jersey

business practice

I worked for a company for about 5 years. In that time I took a small entity and made into something. But over the last 2 yaers, my partners as it were have taken clients, business, and employees and all but put me out of business. Now due to their actons there is a back tax issue. I have a tax attorney dealing with that, but they want to charge me with embezzlement, or misapprioated funds. Can they do that?

thanks


Asked on 2/22/05, 1:54 pm

1 Answer from Attorneys
John Corbett Corbett Law Firm LLC

Re: business practice

As a practical matter, your partners can sue you for anything that they want. That does not mean that they will win the suit. This is a "complaint", not a "charge." Charges imply a criminal offense that would be brought by a prosecutor if he is convinced that there is embezzlement. That charge would have to be brought before a grand jury in order for the prosecutor to obtain an indictment.

The equivalent civil offense is called "wrongful conversion." Here, "conversion" refers to the misappropriation of property.

It sounds as if you have cause for a counterclaim for breach of a fiduciary duty to the partnership. Even without a written non-competition agreement, every partner owes the partnership and the other parners a duty not to act to the detriment of the partnership. If your partners have enticed customers from the business of the partnership, they are liable for damages.

If that doesn't answer your question, give me a call. See the contact data below.

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Answered on 2/22/05, 10:11 pm


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