Legal Question in Business Law in Utah

closely held corporation

My brother and I had a corporation for 5 years together. He had a mental break down (drugs) and said buy me out of the company. After that I never heard from him. We found out he had been using company funds to pay his drug dealer and he hadn't done part of his share of the business for over a year. We had to catch that up and then had our accountant come up with an offer. My lawyer sent him a letter with an offer. He refused, and has dragged his feet for the past year and a half finally coming back with a counter offer (we would contact them trying to find out what was going on and they would put us off) . We rejected it and made another offer. We have been trying to resolve this but feel he is dragging his feet. We talked yesterday about resolving this and then today got a letter telling us he had filed for dissolvement. At what point in time do we need to value his shares (we have made a lot of money since he left) this was a closely held corporation and the arrangement from the start was you do half the work, you get half the money. When we go to court are we likely to get value determined as of the date he left, the date he filed?(we would have filed earlier but he led us to beleive this could be settled out of court.


Asked on 3/24/08, 3:42 pm

1 Answer from Attorneys
Alvin Lundgren Alvin R. Lundgren, L.C.

Re: closely held corporation

Your facts are specific to your case. Generally the actions in a corporation are governed by the bylaws, and if there are no bylaws, then by the Corporations Code. Usually where there is dishonesty that person has to reimburse the corporation. You can generally remove the malfeasing person from active participation in the company, but the interest in the shares may remain. However, you have specific facts, which I would be happy to discuss with you. Call for a free consultation.

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Answered on 3/26/08, 4:53 pm


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