Contract gone sour but not on my end

[Joshyna1]

Hello, I went in to business with two men, of which I'm friends with the other was a friend of his. I loan them five thousand dollars in February. The contract stated I would receive six thousand dollars back by August and 15% of what the company made its first year and 10% it's second year. In late may my friend and the other partner dissolved the company and my friend walk away with nothing and no ties the other partner had full ownership. I have contacted the sole owner and he stated I would receive my money by the date on the original contract. That date has since past and he sent me his attorney information stating that he no longer feels it's fair that the other partner (my friend) walked away free and clear so he is suing him. I don't know what any of this has to do with me I just want my six thousand dollars I don't even care about the 15 or 10% I don't want to be apart of his business any longer. Please someone point me in the right direction. Thank you in advance

 

[latigo]

First of all without knowing all of the material terms of the "contract" it is impossible to know whether it represents an investment or a loan of the $5K. You need to have it read and analyzed by your lawyer.

If a loan, an agreement to repay the principal $5K plus 20% in 6 months could be usurious and have legal consequences depending on the laws of the state, which you have neglected to mention.

You also need to explain to your attorney what is meant by telling us that "I went into business with two men . . " and to what extent you were involved in the "business". That too could have legal repercussions.

For example, you already admit to anticipating a sharing of the profits. Which is one step towards becoming a member of a business partnership (intentionally or inadvertently)

Another could be the investment of the money/capital. And having failed to disclose how the business is structured, if at all, one more step could make you personally liable for the debts of the business. Especially if the business has not been formed and qualified to function as a separate legal entity. Not to mention you reference to the principals as "partners".

Anyway, the issues are too numerous and complex to be addressed at this distance. So spend some money with your attorney.