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Long story short - Invested quite a bit of money in a restaurant deal but things aren't moving well.
Am a minority partner in this deal and the person who has super majority(>60%) isn't running the restaurant as we expected in-fact the projected revenue has been significantly lower.
This person refuses to meet in person nor discuss changes in the business model and 'claims' that he has super majority so doesn't have to listen to me.
What is my recourse? of-course the usual suggestion is to seek legal opinion but is there anything else that I can do...
Also, can anyone recommend a competent attorney/lawyer in Raleigh, NC area who typically deals with these kind of business disputes?
When it comes to investing, people only think of the investment if it makes money. Unfortunately, the business that you selected is one of the worse businesses to start. The failure rate is very high.
A venture capital firm invests in 10 businesses. 7 of them will flop, 2 will break even and 1 will be a home run.
They don't go trying to "recoup" money from the 7 start-ups that flopped. They are professional investors, they understand--THEY COULD LOSE MONEY.
Unless this was a scam, which it doesn't sound like it was, you probably need to take this as a lesson and take the loss. Even with a scam, you probably cannot get your money back. It doesn't work like that.
There is risk with investing, you decided to incur that risk with you become an "investor".
Restaurants are genuinely a bad bet. The failure rate is abysmal. Most likely, you are going to lose your money because you made a bad investment.
However, even if the partner has a majority of interest in the business, if you can prove that his bad management is destroying the business, you can force the business into a sort of receivership where a court appointed supervisor will take over.
It would have to be glaringly bad management and not just a disagreement about how to run the business. Also, that supervisor has to be paid and the lawyer has to be paid, and all the court costs have to be paid, so it might not be worth it.
Seriously, you need to go and talk to a mean lawyer and see what he says. No one here can do much or give any legal advice that will help you.
Oh wait. Maybe you can get the restaurant onto that Gordon Ramsey show where he straightens out bad restaurants. I can't remember what it is called, that show, but he really gets bad management straightened out, usually with a lot of bad language.
Oh wait. Maybe you can get the restaurant onto that Gordon Ramsey show where he straightens out bad restaurants. I can't remember what it is called, that show, but he really gets bad management straightened out, usually with a lot of bad language.
Above possibly something to think about....
My day job work with different attorneys (not an attorney myself) structuring legal cases, experienced with legal litigation.
Before you go spending money you don't have to. First suggest you send a registered demand letter stating your intentions, saying you are not happy with the way they are operating the establishment.
Also mentioning (not in detail) you seeking legal remedy's if they change their ways.
Before you go spending money you don't have to. First suggest you send a registered demand letter stating your intentions, saying you are not happy with the way they are operating the establishment.
Also mentioning (not in detail) you seeking legal remedy's if they change their ways.
...
Thank you . You offered a good suggestion compared to other posters. I suppose most of them like to give 'free' opinion rather than 'meaningful' opinion(s)..
Long story short - Invested quite a bit of money in a restaurant deal but things aren't moving well.
Am a minority partner in this deal and the person who has super majority(>60%) isn't running the restaurant as we expected in-fact the projected revenue has been significantly lower.
This person refuses to meet in person nor discuss changes in the business model and 'claims' that he has super majority so doesn't have to listen to me.
What is my recourse? of-course the usual suggestion is to seek legal opinion but is there anything else that I can do...
Also, can anyone recommend a competent attorney/lawyer in Raleigh, NC area who typically deals with these kind of business disputes?
Your recourse may be limited to what is in the contract.
What is the actual structure of the business? Is it a closely held corporation? A limited liability company, a limited liability partnership (and also a limited partnership)?
If it's a limited partnership, then the general partner is correct - As a limited partner, you have very little to no control over the business, and have only a financial interest.
In which case you will need a lawyer to assert a claim against the GP has violated a duty owed to the partnership - however, the business judgement rule generally doesn't allow you to successfully sue someone for making bad decisions in the running of a business.
In the restaurant business, success or failure hinges almost entirely on one number “SALES”. Opening a new restaurant always entails risk. You can reduce your risk by carefully projecting and considering the sales to investment ratio of a proposed venture.
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. You offered a good suggestion compared to other posters. I suppose most of them like to give 'free' opinion rather than 'meaningful' opinion(s)..
