What is the name of your state? PA 
Pennsylvania.
OK here goes...
Family business. Stated 20 years ago by Dad. (1982)
Dad asked me to join the company as a partner (1985)...I was 25 yrs. old.
Dad gave me a hand written note-stating welcome aboard partner, blah, blah, blah, signed DAD.
I invested about $10K in computer equipment and hundreds of thousands dollars in "human capital"
( 1995) 10 years later.... I press dad for something more than his note to establish ownership. He shows me the company tax return showing me as 1/3 owner.
My Dad, My Mom, and Me. (I accepted that.)
( 1997 ) My parents pull out of the business and leave me to run the operation.
They "TELL" me I'm the president....and I work my $%#% off to grow the biz.
(1999 ) I find out that since I don't hold stock certificates I have no ownership. I confront my parents ( now approaching their 70's ) and the games begin.
I try for several years to negotiate....and every year the price of the biz goes up and gets more ridiculous.
Note: I've been signing documents that I'm the president even though we NEVER have had company minuets or official documents stating that I am the president.
Next my parents file as sub chapter "S" as 50% each.
I still try to work things out....( I have five other siblings )
I was successful at raising my salary but continued to pay them about $60K in various forms of payments. (Salary, insurance, expense check, rents, medical, car, etc... ) for several years.
2004 I put my foot down, asking my father if he thinks I paid him the goodwill.
He verbally agrees. I want to buy the cash on hand, on the street and inventory.
I make him an offer...He says double it.... I say "find another buyer,” he agrees, my mom shoots it down. I say I'm taking the employees, customers, and suppliers if they don’t get this done.
They ignore me... I stop their pay, (not medical insurance)
For the first three months, I hear nothing from them.
I re-activate a dormant company I formed in 1997 to buy them out.
(My father actually paid my corporation money for several years)
I started operating the new corporation in parents building and switching their customers over to my new business (all the employees and suppliers were “willingly” on my side)
My parents knew I was operating my business since April/2005 and did not come into the kick us out until July. (I did try to negotiate.... but was fed-up with their parental games)
Now we have a civil suit against us for $600K
Stating I was an officer of the company and I took away all their business
I have contracted a lawyer, but looking for a second opinion.
My lawyer thinks I have exposed my self to about $300-350K liability
I’m willing to pay them something.... but not that much.
Total Sales are about $1M My salary is $100K
They are also involving my wife who works for the company. ( but is not an officer.) although my Dad gave titles away like promotional gifts, he made have even given her the title of Treasurer since she handled the books along with an outside accounting firm. Note: My Parents are stating in the civil suit that we withheld financial information from them. Our independent account who did both my taxes and my parents taxes, stated that he would testify that my parents never contacted HIM with any financial questions “about the business” for the last seven years.
Question: I know for a fact that “ I WAS NEVER INVOLVED IN COMPANY MINUETS WITH MY PARENTS” My father told be VERBALLY I was president.
Just like he told me VERBALLY I was an owner.
If I signed company tax returns as the president…..does that make me the president? Thoughts on my financial exposure.......?
Comments?
Dean
Pennsylvania.
OK here goes...
Family business. Stated 20 years ago by Dad. (1982)
Dad asked me to join the company as a partner (1985)...I was 25 yrs. old.
Dad gave me a hand written note-stating welcome aboard partner, blah, blah, blah, signed DAD.
I invested about $10K in computer equipment and hundreds of thousands dollars in "human capital"
( 1995) 10 years later.... I press dad for something more than his note to establish ownership. He shows me the company tax return showing me as 1/3 owner.
My Dad, My Mom, and Me. (I accepted that.)
( 1997 ) My parents pull out of the business and leave me to run the operation.
They "TELL" me I'm the president....and I work my $%#% off to grow the biz.
(1999 ) I find out that since I don't hold stock certificates I have no ownership. I confront my parents ( now approaching their 70's ) and the games begin.
I try for several years to negotiate....and every year the price of the biz goes up and gets more ridiculous.
Note: I've been signing documents that I'm the president even though we NEVER have had company minuets or official documents stating that I am the president.
Next my parents file as sub chapter "S" as 50% each.
I still try to work things out....( I have five other siblings )
I was successful at raising my salary but continued to pay them about $60K in various forms of payments. (Salary, insurance, expense check, rents, medical, car, etc... ) for several years.
2004 I put my foot down, asking my father if he thinks I paid him the goodwill.
He verbally agrees. I want to buy the cash on hand, on the street and inventory.
I make him an offer...He says double it.... I say "find another buyer,” he agrees, my mom shoots it down. I say I'm taking the employees, customers, and suppliers if they don’t get this done.
They ignore me... I stop their pay, (not medical insurance)
For the first three months, I hear nothing from them.
I re-activate a dormant company I formed in 1997 to buy them out.
(My father actually paid my corporation money for several years)
I started operating the new corporation in parents building and switching their customers over to my new business (all the employees and suppliers were “willingly” on my side)
My parents knew I was operating my business since April/2005 and did not come into the kick us out until July. (I did try to negotiate.... but was fed-up with their parental games)
Now we have a civil suit against us for $600K
Stating I was an officer of the company and I took away all their business
I have contracted a lawyer, but looking for a second opinion.
My lawyer thinks I have exposed my self to about $300-350K liability
I’m willing to pay them something.... but not that much.
Total Sales are about $1M My salary is $100K
They are also involving my wife who works for the company. ( but is not an officer.) although my Dad gave titles away like promotional gifts, he made have even given her the title of Treasurer since she handled the books along with an outside accounting firm. Note: My Parents are stating in the civil suit that we withheld financial information from them. Our independent account who did both my taxes and my parents taxes, stated that he would testify that my parents never contacted HIM with any financial questions “about the business” for the last seven years.
Question: I know for a fact that “ I WAS NEVER INVOLVED IN COMPANY MINUETS WITH MY PARENTS” My father told be VERBALLY I was president.
Just like he told me VERBALLY I was an owner.
If I signed company tax returns as the president…..does that make me the president? Thoughts on my financial exposure.......?
Comments?
Dean