Can I sue?

[tnielsen91]

What is the name of your state? Texas

I have a venture where there are 4 Partners. We all own about 25 percent of the company in voting and non voting stock. , However one of the sahreholders, not me, has 51% voting rights. This shareholder also owns and operates a business outside of this one. He made a motion to have his other company purchase our LLC. Why all of the other member s are in agreement of this, I am not for various reasons. Put that aside, this shareholder had access to confidential info about the LLC. He gained access to this info for the benefit of his other business to make an offer. It is my belief that the offer is extermely low based off the current set of financials. We make alot of money. If I were to buy it, I would ask at least 3 times what he offered.

Do I have any sort of claim here? It is a private company, but he gained access to confidential information and instructed our CFO to come up with a purchase price. The CFO came up with a number that was about 3 times his buy out amount. He disregarded that number.

He drafted the merger papers with his atty and presented them to us last week. It included terms at which I was to abode by and set a non compete for 5 year. I would still be an employee. What are your thoughts?

 

[BelizeBreeze]

What is the name of your state? Texas

I have a venture where there are 4 Partners. We all own about 25 percent of the company in voting and non voting stock. , However one of the sahreholders, not me, has 51% voting rights. This shareholder also owns and operates a business outside of this one. He made a motion to have his other company purchase our LLC. Why all of the other member s are in agreement of this, I am not for various reasons. Put that aside, this shareholder had access to confidential info about the LLC. He gained access to this info for the benefit of his other business to make an offer. It is my belief that the offer is extermely low based off the current set of financials. We make alot of money. If I were to buy it, I would ask at least 3 times what he offered.

Do I have any sort of claim here? It is a private company, but he gained access to confidential information and instructed our CFO to come up with a purchase price. The CFO came up with a number that was about 3 times his buy out amount. He disregarded that number.

He drafted the merger papers with his atty and presented them to us last week. It included terms at which I was to abode by and set a non compete for 5 year. I would still be an employee. What are your thoughts?

My TOUGHT is where is YOUR attorney?

 

[tnielsen91]

My TOUGHT is where is YOUR attorney?

On vacation for the holidays.. and I will be asked where is your paperwork tomorrow morning. Whithout tipping him off that I may want legal advise thus being terminated, I was seeing from the experts out here if I have any ground to stand on.

 

[divgradcurl]

Try and get in touch with your attorney -- there are all kinds of issues here to think about, such as breach of fiduciary duty (the self-dealing by the controlling partner, etc.). The noncompete may may be an issue as well, usually 5 years is waaaay to long for a valid noncompete. I wouldn't sign anything until you talk with your lawyer.

 

[tnielsen91]

Try and get in touch with your attorney -- there are all kinds of issues here to think about, such as breach of fiduciary duty (the self-dealing by the controlling partner, etc.). The noncompete may may be an issue as well, usually 5 years is waaaay to long for a valid noncompete. I wouldn't sign anything until you talk with your lawyer.

I spoke with an atty today. He agreed that we indeed have a case. But the case revolves a different issue about his conduct and as he said, it looks very good at this point. Is it Ethical to not only persue down my current path, but also sue for breach of fiduciary duty? Is it wise to double things up like this or take one at a time?

 

[BelizeBreeze]

I spoke with an atty today. He agreed that we indeed have a case. But the case revolves a different issue about his conduct and as he said, it looks very good at this point. Is it Ethical to not only persue down my current path, but also sue for breach of fiduciary duty? Is it wise to double things up like this or take one at a time?

You, or better said, your attorney, can combine the two issues into one action.

 

[tnielsen91]

You, or better said, your attorney, can combine the two issues into one action.

With the presumtion that I am not an atty or an accountant, if I post some numbers, can I get some help on evaulating that if I proceed with a shotgun buy/sell, that the numbers look OK to a layman or that someone would chime up and say what they think? Like.. no way will it work?

 

[Roger Jones]

With the presumtion that I am not an atty or an accountant, if I post some numbers, can I get some help on evaulating that if I proceed with a shotgun buy/sell, that the numbers look OK to a layman or that someone would chime up and say what they think? Like.. no way will it work?

See if you can get the other shareholders to get Mr. 51% to agree to having an outside valuation of the company. You can find CPAs & other firms who specialize in valuations. See if the other shareholders will stand with you in demanding a valuation of the company be done before any sale.

You said he had inside knowledge, you mean self dealing because he knows the financials? Has this guy done anything that is illegal besides the breach of fiduciary duty/ self dealing etc.? You might want to consider hiring a private dectective. Could any assets have been diverted to his other company? The CFO huh? Does the firm use an outside CPA firm? Do you get a yearly audit or financial statement? A good CPA may have some suggestions for you to try to block the sale or slow it down.

The 5 year non-compete is too long. 18 months or less.