Any thoughts...is it too late?

[momto2]

What is the name of your state? Indiana

This situation we are in is very complicated & I am in need of any assitance.

2 years ago we were approached by 2 ladies who were interested in helping us open a business that we had been trying to get started. It was kind of weird, as it was never clear to me if they were intending to be partners, or just repaid the money they invested...we were just so excited to have our dream become a reality we didn't care one way or the other.

We were provided w/ 30K for the downpayment on a building that is her name only & all of the equipment we needed. When we opened the business we only had enough $$ for 1 weeks worth of supplies. My husband worked for 2 months without making a dime. (We had told her we would need $500/wk to make ends meet.) I was doing the bookkeeping even though we had expressed to her that we would have to hire an accountant becaue I did not have more than just a basic knowledge, and I was never paid any money.

My husband was working 18+ hours a day seven days a week, making $260/week. I was spending endless hours in the shop working & on the computer at home attempting to do the books. (there was never any money to hire an accountant.) The business was staying afloat but when we came up short for our quarerly payroll taxes we asked for some additional $$. She gace as additional $10K and once that ran out indicated that she wasn't going to let us borrow anymore.

Everything was in her name. I did sign the tax work that I prepared/signed for deliveries/etc. My husband had his name listed with one of the vendors.

Fast forward 18 months. The business was getting behind (dang quarterly taxes again) in the bills and she approached us & said she wanted everything transferred to our names. We refused & she "let us go" and hired new "employees".

I handed the books over to her & because our computer crashed she is having to re-enter most of 2004. As she is running the numbers it "appears" lots of money is missing...when actually it was cash paid out to workers. SHE has suggested & encouraged us to pay people we trusted cash. (We did not take/recieve any cash).

So...we are on our way to getting sued...and I am scared to death & don't know what i can or should do. We were living in poverty before this & now I have got a paying job but my husband is out of work, there is no way we can afford an attorney.

 

[stephenk]

since you can't afford an attorney, what do you expect from this forum? You and hubby just let some stranger give you money to run her business, you run it poorly, you pay cash to vendors, etc. without documenting the amounts paid, and NOW you are worried about being sued.

Find a way to hire an attorney. you really need one.

 

[momto2]

Let me clarify...

I guess I should have clarified. I have never had to hire an attorney before. I don't know who to contact, what kind of attorney would help us? I don't even understand the different TYPE of attorneys. And how do you pay an attorney, can we make monthly payments? I should have sought the advice BEFORE we attempted this venture, obviously.

Also, when we ran the business it was NOT run poorly. It was an asset to our community in many ways & we were doing VERY well for a new small business (sales have decreased by nearly 45% since she took over). The poor choices we made were at her advisement.

She had agreed to give us the money for start up expenses...30K. We needed an additional 130K for the 1st years operating expense. She agreed to this verbally. We never saw any of the additional opertaing expense that we needed, except that 10K. Are you a business attorney? We were advised by the business counselors (NOT attorneys) that we consulted with that we needed at least the first years operating expense to make this work.

Edited to ask: I want to know EXACTLY what she is able to sue us for? What is the "legal" term so that I can research it, and I also wonder if we have any ramifications against her.

Please don't judge me. You don't know how HARD we worked to try to make this work or the sacrifices we made to make this business what it was. Our only problem is that we didn't have the money to back it. She has even admitted that she can't say where we went wrong in operating the business. The issue with the cash paid out has only come up recently. We are a family of four and we lived like poor people trying to get this thing going. We don't drive fancy cars..etc...etc...we are just HARD working people who got involved in a bad situation (for all involved).

I appreciate your time.

 

[stephenk]

look for a civil litigation attorney who specializes in contract/business disputes. ask other business owners you know who they use for legal issues related to their companies.