Legal Question in Business Law in Ohio

Re: Officer Leaves Company and Wants Investment Back

First, I do not want to preach but this is why you should have a written Shareholder's Agreement. If you do not want to pay for a lawyer, write your agreement down on paper, sign it and notarize it. Since your agreement was oral, I do not know your oral

agreement regarding one shareholder's withdrawal from the company. Clearly, he owns some % of the stock and therefore is entitled to at least that % of the current net

worth of the company. He is not entilted to immediate re-payment if that was not your oral agreement. If you want him out for good, then you must work out an agreement with him which must be in writing. Agreements are always better than lawsuits. The Agreement may be that he is paid his capital contribution (no interest) or it could be his stock interest say 50 %, 50 % of the current value of the company at the time he left.

As to venue, venue is proper in Florida. I do not practice in Ohio, but venue is probably proper there as well. If everything he is suing aboutis Ohio related i.e. Ohio deals, Ohio witnesses involved, etc., venue may be more proper in Ohio. I do not have enough facts. Venue is a very important tactical decision. If you know that he will definately sue you, sue him in Florida first He would have to pay a Florida lawyer. That may make him more cooperative.

Re: Officer Leaves Company and Wants Investment Back

I would strongly advise the possibility of Private Mediation in advance of any litigation going forward by either party. You may be able to resolve the issues and keep your Florida business out of Court,saving time and expense, as well.

Our firm has a Commercial Litigation Dept, as well as several Certified Circuit Civil Mediators. I would be happy to refer to someone here. We are located in S.W. Florida.

L. Anton

(239) 334-4121

Re: Officer Leaves Company and Wants Investment Back

You have run into a classic problem - starting a company with someone and the two of you not knowing what to do - i.e. a shareholder's agreement. Enough said.

You and the other person are clearly shareholders, what % though is not clear. Second, any debts he entered into to pay into the company are his personal debts, unless they were agreed to by the company. If they were his personal debts, he has to settle those on this own. As a result, he will want you to pay him for that. I do not believe he can say he is 50% owner and the company has enough money to pay him off. However, litigation is likely to take place.

The question of whether Ohio or Florida is difficult without more. If all of the assets of the company are now in Florida (i.e. no bank accounts, property of any kind, etc.), then a judgment in Ohio would have to be brought to Florida (domesticate the judgment). It is unclear what kind of claims he may have, but I am sure he would want to have an accounting of the business and a payment of any net worth (if there is any in the company).

Best advise is to reach an agreement and have releases to protect you personally and the company.

Good luck.

George Savage

Re: Officer Leaves Company and Wants Investment Back

Your facts are not real clear but I will offer this, and I would need to be provided with ALL the facts. First Florida Chapter 48 governs venue of corporations. Second, even if Chapter 48 did not permit you to be in Florida, there is rule of civil procedure which may change the venue called "forum non conveniens" or inconvenient forum.

Domestic Corporations. Actions against a domestic corporation may be brought in the county in which the corporation has or usually keeps an office for the transaction of its customary business, where the action accrued, or where the property in litigation is located.n52 A plaintiff may select any of these three venue alternatives, and its choice will be honored.n53 For a corporation to transact business in a county within the meaning of the statute, the business transacted must be a part of its usual or ordinary business and must be continuous, not a mere occasional or isolated transaction.n54 Doing business in a county or having an agent in a county, without more, is not a sufficient basis for venue in an action against a domestic corporation.n55

Foreign corporations. Foreign corporations doing business in Florida must be sued in the county where the corporation has an agent or other representative, where the cause of action accrued, or where the property in controversy is located.n56 The mere existence of an agent for purposes of service of process in a particular county establishes the propriety of venue in that county as to a foreign corporation.n57 If there is neither an agent nor property in litigation, the suit may be brought in any county where jurisdiction may be obtained.n58

Should you need representation in this matter you may contact me at (305) 769-3000. Randall L. Gilbert

Re: Officer Leaves Company and Wants Investment Back

Without a review of whatever documents you have, and a consultation it is impossible to determine the the likely litigation result. Remember, anyone can sue another. Usually investments are just that..a gamble in which you can win or lose. A loan, on the other hand, carries an expectaion of repayment.

I cannot venture a guess on Ohio law, because I am not licensed to practice in that jurisdiction. The same is true for Deleware.

Were the charges he ran up a form of repayment?

I urge you to seek counsel for the purposes of reviewing your exposure and planning for a possible defense,should you or the company be sued.

If you wish to avail yourself of my office, call me at 305-940-8080.

Re: Officer Leaves Company and Wants Investment Back

Since this is a Delaware corporation dissolution would occur in that state.