Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I owned 20% of a business in Colorado. I was fired without notice and not given any reasons to the "firing" other then they "thought" I spook badly about the other owners to clients (not true). I believe they just want more ownership. It really is not a big deal to me, because they are obviously dishonest and sneaking behind my back. So I agreed to sell them my 20%. We met at the accounts office and signed papers that stated I was no longer an owner and gave them my shares. We also signed papers that stated they owed me money for the out of pocket expenses I paid while in the business. The papers stated they had to start payments to be in April. I have yet to see a penny. They want me to sign a non-compete now and refuse to give me the money they owe me until I sign. I understand it is their legal right to ask for a non compete because we are owners and shareholders, BUT is it legal asking me to sign AFTER ive already signed over my shares? Is it legal for them to not pay me until I sign their non compete (which is unreasonable, there is no radius issued...so they are preventing me from opening up a business in the same field ANYWHERE IN THE COUNTRY!)
Years back a good friend was part owner of a large lumber wholesaler. He owned 10% of the business and had been there from day one. He knew all the customers, mostly large builders in the area. After maybe a decade with that company the other owner wanted his son to move into the operation. They were trying to force my friend out. He left work one day and desided that that was all he could take. He opened his own lumber business and took 45% of the business with him. At the time he still owned 10% of the other lumber company and forced them to buy him out.
If you like doing what you were doing I would jump back in, get as many of the customers or clients on board, and start your own company.
...is in kind of different boat. The OP was fired. The rest of the folks running the company don't want him around. That changes things. Alot. Now maybe he they did make stuff up about some disrespectful comments about the other owners but that not matter as much as the fact he has already been "bought out".
The real questions are about money. Is this a $$$$$ big problem that could get real expensive with lawyers and courts or is this more like a $ little problem that the OP can say "I need to have enough cash for X months of finding on job and for that I will sign a non-compete and you can think whatever you want about me"...
The courts are not the cheap or smart way to go. My advice is to ask for reasonable chunk of dough to cover your living expenses while get a new job and move on. Of course if your skills are so narrow that pretty much the only kind of job you could ever hope is gonna force you to violate that non-compete you might wanna think long and hard about alternatives...
Quote:
Originally Posted by SOON2BNSURPRISE
Years back a good friend was part owner of a large lumber wholesaler. He owned 10% of the business and had been there from day one. He knew all the customers, mostly large builders in the area. After maybe a decade with that company the other owner wanted his son to move into the operation. They were trying to force my friend out. He left work one day and desided that that was all he could take. He opened his own lumber business and took 45% of the business with him. At the time he still owned 10% of the other lumber company and forced them to buy him out.
If you like doing what you were doing I would jump back in, get as many of the customers or clients on board, and start your own company.
I owned 20% of a business in Colorado. I was fired without notice and not given any reasons to the "firing" other then they "thought" I spook badly about the other owners to clients (not true). I believe they just want more ownership. It really is not a big deal to me, because they are obviously dishonest and sneaking behind my back. So I agreed to sell them my 20%. We met at the accounts office and signed papers that stated I was no longer an owner and gave them my shares. We also signed papers that stated they owed me money for the out of pocket expenses I paid while in the business. The papers stated they had to start payments to be in April. I have yet to see a penny. They want me to sign a non-compete now and refuse to give me the money they owe me until I sign. I understand it is their legal right to ask for a non compete because we are owners and shareholders, BUT is it legal asking me to sign AFTER ive already signed over my shares? Is it legal for them to not pay me until I sign their non compete (which is unreasonable, there is no radius issued...so they are preventing me from opening up a business in the same field ANYWHERE IN THE COUNTRY!)
anyone?
Find yourself an attorney and perform the legal equivalent of the Third Punic War. Burn down their cities, send their women and children into slavery, and sow salt on the ground in order that nothing can grow back.
Let's just go point by point here.
1) You never cede shares in a business until money has been exchanged. Period.
2) Because they have not paid you, they are in default on the agreement. I'm not a lawyer, but I'm pretty sure it can be argued that agreement is now null and void. After all, they did not fulfill their end of the bargain.
3) Because that agreement is null and void, you have the right as a shareholder to look at their books. Completely and utterly. Do not be shy in this regard. Bank records, payments, the works.
4) They cannot impose a non-compete on you after they reached an agreement with you. What's more, non-competes cannot be as extensive as the one you describe. You have to be able to make a living, after all.
5) Assume that they are not dealing in good faith and act accordingly.
6) Never enter into any agreement without an attorney.
7) Because these guys have hosed you, it's a pretty safe bet that the courts will punish them for breach of contract. They are in not position to demand anything of you at this point, a non-compete being among them. Get paid for your shares plus attorneys fees plus a settlement for breach of contract and go into business against them. That will serve them right.
What cpg said. At this point, sounds like they haven't follow through on their legally bound obligations.
Nope. I think the OP needs to conduct a full body cavity search on the books. After all, if the OP is to be believed, then they fired her on a really flimsy pretext. That tells me that they were suddenly more profitable and didn't want to share the loot.
I just am amazed the pickles people get into. When it comes to my shares of stock, I would run anything past an attorney. I just cannot believe the OP didn't consult one. In fact, I'm not sure if I wouldn't pile on more grounds. Just make up stuff. Anything to make their lives so miserable that they will simply scream, "Fine! Fine! How much do you want to go away?"
On the flip side, firing a partner is tricky. I did it fifteen years ago with a partner who just didn't pull her weight, no way no how. But it didn't come out of the blue. I spent a year trying to get her to do better. But when she blew a profitable piece of business, I just had no choice. I consulted with a very good business attorney on exactly what to say and how to do it and when.
She had bought into the company three years earlier. I offered her a stock buyback of literally 20 times what she paid for it as kind of a goodwill gesture, even though the company's sales had only increase threefold. Instead, she hired an idiot for a lawyer, one who fancied himself a ballcutter, who proceeded to smoke lots of crack when figuring out what her shares were worth. I'm not kidding guys. She literally could have toodled around Europe for two years on what I was offering. Hell, I didn't even ask her to sign a non-compete because she had zero relationship with our clients. Nobody even missed her.
But she wanted to avenge herself and be greedy. Needless to say, I didn't have to buy her shares, so I just kept on doing business as usual and waited her out. Our clients didn't miss her. Our employees didn't miss her. She was really unpopular among the troops, the person who would come in twenty minutes late and leave thirty minutes early because "I'm a partner, that's why." So if you own a business, lead by example. Be the first to come and the last to leave. If you don't think your employees don't notice, think again.
Finally, she came back to the bargaining table a year later, after she fired her incompetent attorney and hired one with some brains. I still gave her a decent payment for her stock, essentially four times what she paid for it. But she missed out on some $150,000 in cash just because she had something to prove. What an idiot.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Good answer but the OP...
