+ Reply to Thread
Results 1 to 6 of 6
  1. #1
    Join Date
    Jan 2017
    Posts
    3

    Using (damaging) information as leverage

    What is the name of your state (only U.S. law)? NY

    I have a dispute with a (retail) business, over work I performed for them to the amount of 10k over 4 years. There was no formal contract, but the work was well defined in an email, asking me if I would be able to do it or will they need to look for somebody else, as well as that it will be paid work. They were quite happy with the work and did reiterated that they will pay me when I send them invoice (which I didn't do for a long time.)

    We also agreed to enter into a separate partnership on a different (publishing) business where I am a minority share and the retail business is the majority, so every corporate decision is made by it regardless of my vote.

    They made the partnership conditional on me completing the work before forming our joint S-corp LLC (incorporated in OH where the retail business is incorporated).

    Four years later they are refusing to pay me for the work I did for the retail business, claiming that they have 'gifted' me my share in the joint partnership with the business partially in lieu of compensation. This is not stated in the operating agreement of the joint business we share, and there is no record anywhere that such exchange could even happen.

    This may be getting too specific and I am most likely going to have to consult an attorney at some point, but I don't think I am there yet and I would still like to try and resolve this by mutual agreement.

    I have information which if I make public will inflict, I believe, substantial damage to the business:

    (1) I control the data (website) of the joint publishing business. If I shut it down or destroy it will stop driving sales to the retail business which is substantial. The operating agreement for the business doesn't specify the nature of the business or lists any assets, only the initial contribution o $500. When we formed the partnership the website was already existing, they had me take control from the previous person and then had a dispute with him over ownership which ended with a settlement.

    (2) I have emails and recorded phone calls which I believe show them to be dishonest, which I believe will severely damage their retail business, as their image is very important to it.

    (3) From the contested work I have a copy of the retail business proprietary information (customer and order data) until Sept. 2016. There was never any formal or informal nondisclosure agreement. I believe that it is valuable to their competitors and even if I cannot just sell it, can I offer 'consulting' services with their competitors where I offer advise based on my analysis?

    (4) I can make public my current dispute, and how I believe they are trying to cheat me. I would think that at least this part is in the clear. It will also illuminate how exactly the retail business controls completely the publishing business, which they prefer to keep obscured.

    I have less than minimum resources, but I know that they are afraid of being in the spotlight because it is bad for their business.

    Again, if it is too detailed and specific, I would be happy to generalize and rephrase, but I am wondering what the general legal implications may be for using various leverage options I have available. Implying that I may have to use some of them may provide them the needed incentive to keep talking with me and try to figure out a solution.


  2. #2
    Join Date
    Jan 2005
    Location
    California
    Posts
    64,960
    Sue the bad guys for the money they owe you. Threatening to "reveal" their business information is not a good idea and may, in fact, be illegal.

    ETA: Don't mess with their web site either. That would be another bad idea.


  3. #3
    Join Date
    Jan 2007
    Location
    Michigan
    Posts
    22,404
    Quote Originally Posted by Indentured_ View Post
    What is the name of your state (only U.S. law)? NY

    This may be getting too specific and I am most likely going to have to consult an attorney at some point, but I don't think I am there yet and I would still like to try and resolve this by mutual agreement.

    I have information which if I make public will inflict, I believe, substantial damage to the business ...
    You are already at the point where you need to consult personally with an attorney in your area, if you are talking of harming a business reputation. With your described mindset, I do not believe you can resolve the matter on your own without putting yourself at great risk of a lawsuit.

    To find an attorney in your area, here is a link to the New York Bar Association: https://www.nysba.org/


  4. #4
    Join Date
    Jan 2017
    Posts
    3
    Thank you, Zinger and quincy, this is helpful!

    Especially the perspective that my current mindset puts me in a dangerous place and at the point to explore a lawsuit.

    I just want to clarify (probably unnecessary) that I do not intend to intentionally go out and harm their business. I was simply trying to understand their position and the effects of what may seem like justifiable actions on my part (complain publicly about an injustice; allow our shared, not their own, website to go down by not putting the hours it needs for which hours I as an owner in a failing business I am not getting compensated).

    I thought that before I start exploring the legal option, it is worth making one more attempt with them. Partially, because I am concerned that with my lack of resources I will simply lose by them vastly outmatching me in this aspect. I have no experience with legal matters and, for example, do not know if 10k is big enough pile of money to to be attractive for an attorney to take on 'contingency' basis. Small claims at their location is limited to 3k, and I may be able to file several suits as separately contracted projects, at different times and of different nature, but I understand that such splits are not clear cut and a judge will have to decide on it.

    They have not refused to pay the invoice in writing, only verbally at the end of the mandatory annual business meeting of our joint company. They said the dispute will be on the agenda for the meeting (seems inappropriate since it's unrelated and irrelevant to our joint company). When I brought it up at the conclusion of that call they made clear their position: that they find it ungrateful from me to even ask given how much they've gifted me with the share of the joint venture. When I pressed them for clarity they stated directly that they are not paying the invoice, but if I pay them double that as compensation for their 'gift' of my share they will give me back what I'm asking for.

    I have not had the opportunity to present them with the email evidence stating that the work will be paid, or even state it and have them reject it. I am thinking that doing that outside of a legal process before doing it within it would be helpful and lead to simpler resolution, but I do not know if I am wrong. Yes, I believe, they are the bad guys, but I may not be the person to successfully challenge them in court and then the bad guys just get another positive reinforcement

    Basically, what I am asking is:
    Since I am not intending to harm/obstruct/damage/etc. any business or business relationship, but quite the opposite - find a solution that would prevent deterioration of relationships and value loss that litigation tends to cause - does it make sense that I make this additional attempt to ask for my money by rejecting their narrative and presenting some evidence to the contrary? Or is it better to do this during a legal process, that doing it before generally hurts one's chances later during legal battle?

    Again, many thanks for the help, and I hope I am not overstepping any bonds.


    Last edited by Indentured_; 01-10-2017 at 07:23 PM.
  5. #5
    Join Date
    Jan 2007
    Location
    Michigan
    Posts
    22,404
    Quote Originally Posted by Indentured_ View Post
    What is the name of your state (only U.S. law)? NY

    I have a dispute with a (retail) business, over work I performed for them to the amount of 10k over 4 years. There was no formal contract, but the work was well defined in an email, asking me if I would be able to do it or will they need to look for somebody else, as well as that it will be paid work. They were quite happy with the work and did reiterated that they will pay me when I send them invoice (which I didn't do for a long time.)
    I suggest you concentrate on collecting the $10,000 owed you by the company for the work you performed for them over the course of 4 years.

    I suggest that you take to an attorney in your area the "well defined" emails between you and the company, that details the work you were to do for the company. You should also take to the attorney evidence that you completed the work for the company as agreed.

    I suggest that you avoid (at least for now) getting involved in any other business arrangement with the company, especially considering all that you have said about the company.

    The New York attorney can advise you on your best course of action after a personal review of the facts. Good luck.


  6. #6
    Join Date
    Jan 2017
    Posts
    3
    Thank you very much, quincy, this is indeed my perspective - trying to collect my money and run away. I appreciate the advise and intend to follow it.

    Unfortunately, I am already associated with the company in the separate partnership, which I can not imagine continuing, but it is a secondary problem to resolve. I will continue to perform my duties there, as I always have, until another arrangement is made.


+ Reply to Thread

Similar Threads

  1. Replies: 15
    Last Post: 02-12-2011, 02:26 AM
  2. Disability being used as leverage.
    By ganache in forum Child Custody & Visitation
    Replies: 9
    Last Post: 09-15-2009, 03:33 AM
  3. Do I have any legal leverage here? Please, Please Help.
    By Jennifer31 in forum Buying & Selling a Home
    Replies: 4
    Last Post: 10-18-2006, 07:40 PM
  4. Using the kids as leverage
    By CJane in forum Child Custody & Visitation
    Replies: 28
    Last Post: 06-19-2006, 12:07 AM
  5. termination and leverage
    By antoniomelandri in forum Child Support
    Replies: 10
    Last Post: 08-15-2005, 07:37 PM

Tags for this Thread

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •  

© Since 1995 Advice Company, All Rights Reserved

FreeAdvice® has been providing millions of consumers with outstanding advice, free, since 1995. While not a substitute for personal advice from a licensed professional, it is available AS IS, subject to our Disclaimer and Terms & Conditions Of Use.