Legal Question in Business Law in Tennessee

We bought into a business 3 months ago and have found that the people we partnered with have been taking money from the business account to pay for personal. We have a contract. However, only the contract has our names on them and the business account. Everything else, ; lease, bills, licenses, etc is in their name. The business is failing because of the embezzling of the funds. No funds + can't buy products = nothing to sell. The partner with his name on everything has changed the locks on the store and banned us from the store because we found out his dealings and called him out on it. He also told us that he is closing the business but that was not a fact. We want out. There is a termination clause in the contract. We want to sue to liquidate and dissolve the business. However, the company is in so much debt; back taxes (none paid), leasing agreements (also none paid), behind in all utilities and rent (two months), etc. that we wanted to know if we should just walk away with the investment loss or pursue the lawsuit? If we don't sue, they will liquidate and keep the $. HELP PLEASE.


Asked on 12/05/10, 10:23 am

1 Answer from Attorneys
Kevin B. Murphy Franchise Foundations, APC

As a Franchise Attorney I can say a lot more information and detail is needed before any attorney can advise you. What kind of business was it: corporation, partnership, LLC oir ? A review of all relevant and related documents is required before any options can be considered. Consult with a good business or franchise attorney in your area as soon as possible 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 12/10/10, 2:36 pm


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