What is the name of your state (only U.S. law)? Illinois
This is a C Corp:
Three years ago a co-worker and I, who I worked with for over 10 years, purchased the business from the estate of the owner we were working for when the owner died. In order to do so, we had to take out an 8 year business loan to pay for the purchase. She is in charge of all sales including generating new leads and I am in charge of day-to-day operations of the business. We have 6 other employees. Everything was fine, despite the bad economy, up until about 12 months ago when we had to make another round of cost cutting cuts to reduce overhead due to the economy. Since she had just inherited a very large sum of money, she suggested she would go without a salary, rather than lay off another key worker, until we get back on our feet. So that's what we decided to do. Everything was fine at first, and then she started showing up late for work more and more. Showing up only three days a week, then showing up only one day a week, and now she has not been in the office since late October. Our sales have dropped from an average of $50,000 a month to $10,000 in December. I have talked to her about this and she continually states that there is nothing for her to do in the office and why should she spend the gas money and time, when there is nothing for her to do. Since we are now struggling to make our monthly obligations, I no longer can afford to pay her, to start her salary up again. She is no longer generating sales leads, only taking care of her current clients, when they contact her directly on her cell phone. She no longer visits our current clients, which she used to do at least once a month. I have contacted our corporate attorney and she is no help only stating that I should buy her out. But that is not an option, because I do not have the money to do that. A colleague suggested looking into dereliction of fiduciary duty. The reason our sales are down is because she is not doing her job. What are my options on this?
This is a C Corp:
Three years ago a co-worker and I, who I worked with for over 10 years, purchased the business from the estate of the owner we were working for when the owner died. In order to do so, we had to take out an 8 year business loan to pay for the purchase. She is in charge of all sales including generating new leads and I am in charge of day-to-day operations of the business. We have 6 other employees. Everything was fine, despite the bad economy, up until about 12 months ago when we had to make another round of cost cutting cuts to reduce overhead due to the economy. Since she had just inherited a very large sum of money, she suggested she would go without a salary, rather than lay off another key worker, until we get back on our feet. So that's what we decided to do. Everything was fine at first, and then she started showing up late for work more and more. Showing up only three days a week, then showing up only one day a week, and now she has not been in the office since late October. Our sales have dropped from an average of $50,000 a month to $10,000 in December. I have talked to her about this and she continually states that there is nothing for her to do in the office and why should she spend the gas money and time, when there is nothing for her to do. Since we are now struggling to make our monthly obligations, I no longer can afford to pay her, to start her salary up again. She is no longer generating sales leads, only taking care of her current clients, when they contact her directly on her cell phone. She no longer visits our current clients, which she used to do at least once a month. I have contacted our corporate attorney and she is no help only stating that I should buy her out. But that is not an option, because I do not have the money to do that. A colleague suggested looking into dereliction of fiduciary duty. The reason our sales are down is because she is not doing her job. What are my options on this?
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