Legal Question in Business Law in Washington

Re: Corporate Business Problem

This must be a very troubling situation for you on many levels.

I can't give you a definite answer as to what your husband's rights are, because there are a lot of missing pieces to the puzzle here, but let me give you some things to think about.

The first question I would ask is how the original $30,000 investment was documented. If your husband is shown as a shareholder, or if it could be argued that he is a shareholder (if the documentation is sketchy), then he cannot just be "voted out". He may no longer be an officer of the company, but shareholders still have rights. I would need to see how the original investment is documented to see whether it could be argued that your husband in fact owns a 60% share (in which case, his position is very strong.)

If the investment is documented on the books as a loan, he still has certain rights in this situation, and there are legal steps he can take over and above simply asking for a note.

Much depends on how the corporation is set up, how the original investment of $30K is documented in the corporate files, and whether the other two parties have been observing corporate formalities.

The advice to get a note might have made sense as a starting point, since this is your father, and though based on what you write, he is not treating you and your husband decently, it would have been nice to keep things low key. However that just does not seem to be working, and depending on the details of your case, you and your husband may have additional options.

Do not lose the piece of paper that your father signed. There are other things to try before going to court, but it will be helpful evidence. Do not sign the release of interest until you have consulted an attorney. And consult an attorney who focuses on the problems of small business. This kind of situation happens a lot, and you may have additional recourse depending on details not clear from your question. Good luck!

Re: Corporate Business Problem

This is one of those problems that may be best solved by attempting mediation first. I've often thought of starting a support group for women who become "business spouses." You are in the worst of all worlds, caught between your father and your husband. If I had to warrant a guess, there are financial difficulties now present with the business as well. I think discussing this matter with an attorney familiar both with corporate law and with bankruptcy law with give you additional knowledge to deal with the issue. As Ms. Beecher noted dissenters do have rights and if you are to go forward on an action you need to start assembling that information. Since the flooring line is probably many more dollars at risk, I would address that first.