Legal Question in Credit and Debt Law in Ohio

Length of time on subordinbation agreements

A friend left employment at a company where she held stock. As a requirement for receiving payment for the stock, she had to sign a subordination agreement and take a cognovit note. Regrettably, others who left earlier were paid a lump sum for thier stock. After receiving four payments (on a monthly basis) the company obtained credit from a new bank and the subordination agreement was enforced.

The previous debt was around 60,000-70,000 dollars; she has not received payment for over three years (interest is around 8%).

We don't believe the company has any intention of paying her back. We are curious as to how long - in good faith - a subordination agreement can run? The company gives her no information on anything that is going on.

We feel that she is fortunate that the company did buy the stock back and she has the note. Others have asked to be reimbursed but have refused the agreement.

The company continues its daily operation with payroll, normal expenses, ect.

It does not seem as though they are making any good faith effort to resolve this - because they don't have to!

Can this go on indefinitely? Wouldn't a judge at some point say enough is enough?

WE need analysis, case law and suggestions, please.

1 Answer from Attorneys

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