Good Faith
Junior Member
What is the name of your state (only U.S. law)? Massachusetts
I originally submitted this post as an “Employment Law” thread, but the responses suggested that the matter of my inquiry was not one of employment law, but rather one of business and corporate law. I would appreciate any perspectives from those knowledgeable about this area.
Several years ago I co-founded a successful (educational) enterprise that was forced to bring in an outside investor, who promptly ran roughshod over the legitimate BOD [all educators, not experienced businessmen], ignored demands from the Board President to give a proper accounting of his purported (undocumented) capital infusions, unilaterally relocated the business office to another state, placed family members and cronies on the payroll, and purported to "justify" his rape and abduction of the enterprise by spurious stock manipulations that purported to dilute the founders shares to negligibility while aggrandizing his own beyond credulity.
All 4 original partners/founders were forced out or bought out on the cheap because we could not abide the outsider's tyrannical ways and utter contempt for corporate form. The other 3 did not have the gumption to join me in a court challenge.
I brought suit in civil court for breach of contract, failure to pay salary and other compensation due, stock irregularities, and disregard for corporate form.
Defendant kept no records of his financial machinations or purported stock apportionments, presented virtually nothing in response to attempts at discovery (no financial books, no stock ledgers, no paper trail worthy of the name) -- and has as his sole defense is the spurious claims that (1) my founders shares were "legally" diluted down to worthlessness, and (2) the company could not afford to pay me because it was never "profitable" and "still is not profitable".
Despite having no real defense, Defendant has eschewed mediation, and apparently believes he can prevail at trial based on his claim to incumbency and "ownership" of the school -- which I contend is illegitimate.
I obviously am seeking remedy on the unpaid wage issue, and breach of other compensation contracts. (I also have a strong case for constructive termination). Trial is in several weeks.
My principal question, however is that even if I were to receive a judgment on the compensation issue, I still contend that I have been deprived of rightful ownership, and benefit, of what was once my own, "dream" enterprise.
If I can prove the illegitimacy of the stock manipulations – essentially demonstrating that I was cheated out of my rightful equity position -- do not I have some potential remedy that would oust the parvenu, and restore me to some version of a rightful position within the enterprise -- rather than my simply having to settle for some cash settlement and bitter memories of what "could have been"?
Although I have not filed a separate “stockholder derivative suit”, my complaint does include a challenge of the purported stock apportionment.
What sort of redress might be available to me, and how might this aspect of my complaint play out?
I originally submitted this post as an “Employment Law” thread, but the responses suggested that the matter of my inquiry was not one of employment law, but rather one of business and corporate law. I would appreciate any perspectives from those knowledgeable about this area.
Several years ago I co-founded a successful (educational) enterprise that was forced to bring in an outside investor, who promptly ran roughshod over the legitimate BOD [all educators, not experienced businessmen], ignored demands from the Board President to give a proper accounting of his purported (undocumented) capital infusions, unilaterally relocated the business office to another state, placed family members and cronies on the payroll, and purported to "justify" his rape and abduction of the enterprise by spurious stock manipulations that purported to dilute the founders shares to negligibility while aggrandizing his own beyond credulity.
All 4 original partners/founders were forced out or bought out on the cheap because we could not abide the outsider's tyrannical ways and utter contempt for corporate form. The other 3 did not have the gumption to join me in a court challenge.
I brought suit in civil court for breach of contract, failure to pay salary and other compensation due, stock irregularities, and disregard for corporate form.
Defendant kept no records of his financial machinations or purported stock apportionments, presented virtually nothing in response to attempts at discovery (no financial books, no stock ledgers, no paper trail worthy of the name) -- and has as his sole defense is the spurious claims that (1) my founders shares were "legally" diluted down to worthlessness, and (2) the company could not afford to pay me because it was never "profitable" and "still is not profitable".
Despite having no real defense, Defendant has eschewed mediation, and apparently believes he can prevail at trial based on his claim to incumbency and "ownership" of the school -- which I contend is illegitimate.
I obviously am seeking remedy on the unpaid wage issue, and breach of other compensation contracts. (I also have a strong case for constructive termination). Trial is in several weeks.
My principal question, however is that even if I were to receive a judgment on the compensation issue, I still contend that I have been deprived of rightful ownership, and benefit, of what was once my own, "dream" enterprise.
If I can prove the illegitimacy of the stock manipulations – essentially demonstrating that I was cheated out of my rightful equity position -- do not I have some potential remedy that would oust the parvenu, and restore me to some version of a rightful position within the enterprise -- rather than my simply having to settle for some cash settlement and bitter memories of what "could have been"?
Although I have not filed a separate “stockholder derivative suit”, my complaint does include a challenge of the purported stock apportionment.
What sort of redress might be available to me, and how might this aspect of my complaint play out?