Legal Question in Business Law in Virginia

Re: Former Employer Owes me Money

Well, first you need to study the Promissory Note very carefully, or even better have an attorney look at it. (Many attorneys like me will simply give you advice without taking the entire case, if you like, just for an hour or so of time.)

You need to pay close attention to whether there was an obligation in there to execute any further documents or take any further action, etc., etc.

Here, the dominant question in my mind is that they already owed you the money anyway. So whether the Promissory Note is valid or invalid is really not going to make much difference.

What can be a big concern is the statute of limitations. The Promissory Note, valid or invalid, will probably serve to extend the statute of limitations. But you need to watch that carefully. It would be 3 years without a written contract, 5 years with a contract, from the date of BREACH (failure to pay). But if the P.N. is invalid, you might not be able to count on that for the SoL.

The question of whether a corporate officer is authorized to enter into a contract is a touchy question. This is generally of great concern to companies, but of little interest to the courts.

Unless you KNEW or should have known that the company official did not have authority to enter into the contract, usually the contract is valid.

Here, again, the company already owed you the money anyway. So the question of authority to enter into the Promissory Note is rather silly. The P.N. was only a means of dealing with a pre-existing debt, which allowed them to pay later instead of right away.

Because the P.N. did not enter into any new debt or new contract, I think they are flat wrong about it being authorized. It was inevitable and unavoidable.

However, if it was unauthorized, and you had no reason to know that, then that is THEIR problem to be sorted out internally.

NOW, it is possible that if they are struggling to get funding, and their new lender wants to have senior place, their inability to get new funding may jeopardize their ability to pay you.

So your legal rights might not mean that PRACTICALLY you should gum up the works, because if the company goes under your promissory note will be worthless.

But if they want you to give up some rights, you certainly should get something back in return (really you have to or it is not enforceable as a modification).

Re: Former Employer Owes me Money

Sue the SOB's for the amount of the promissory note plus costs if you can(after you have an attorney review it along with the shareholder's agreement and the subordination agreement that you never signed).