Extortion

[njlisa]

What is the name of your state (only U.S. law)? NJ
I started a business and a friend offered to help. Now she is demanding that I make her partner. I said no and she is telling my customers that I stole her business and she is going to sue me. I am losing revenue from her lies. Can I sue her in small claims court for defamation?

 

[JoshDom1898]

What is the name of your state (only U.S. law)? NJ
I started a business and a friend offered to help. Now she is demanding that I make her partner. I said no and she is telling my customers that I stole her business and she is going to sue me. I am losing revenue from her lies. Can I sue her in small claims court for defamation?

How did she help you? Did she give you money? Did she give you services? If she gave you money, was it understood between you two that it was a "loan" and not an "investment" is there anything in writing that describes her help and the nature of her financial/services help?

Without a more detailed description of the nature of your relationship between you two, how do we know she's not entitled to ownership of your company?

 

[njlisa]

She helped by selling advertising. In return she received free advertising (more than the amount that a commission would have been paid). She never invested any money. I told her from the start that I did not want a partner. I gave her a choice, I could put it in my name, she could put it in her name or we could form a corporation. She did not want to invest money so she told me she would "help" me. I explained that if I registered it as a sole proprietorship then I would become financially responsible so I wasn't willing to have a partner. Now she is trying to force me to make her a partner by destroying my business. She is trying to make herself look valuable to me. In other words, if she can't be apart of it, she'll destroy it.

I offered to give her the business and work for her but she declined. She wants me to be financially responsible and share the profit.

 

[JoshDom1898]

Did you pay her for her services? Anything at all? Or did she "help" you out of the goodness of her heart?

Sounds like you have a case for tortious interference and maybe usurpation of corporate opportunity...but for slander (verbal) or libel (written) you need to prove what she is telling these customer's is false...

I would get the jump on her and sue her before she sues you, always better to be the plaintiff.

 

[njlisa]

The advertising I gave her was worth about $4000 (the commission would have only cost me $1400).

She told me over and over that she doesn't want money, she just wants a "say" in business decisions. That is why she wants to be partner. She doesn't like the way I run things. I offered to GIVE her the business and she could make all the decisions but she declined. She doesn't want to be financially responsible. She wants to be the boss as long as I pay all the bills.

 

[JoshDom1898]

You make it sound as though the intention from the beginning that she would get a "say" in the business decisions....unless I'm wrong and it was just a straight agreement where she provides you some advertising for your business and she gets to piggyback her ads for her own stuff with your ads...no money exchanged.

So, this begs the question, how is she helping you with advertising and why does she need to piggyback her ads (what are her ads for?) onto your business ads.

Do you have anything in writing that confirmed she didn't want money or official ownership of the business?

 

[njlisa]

I publish a magazine. She has a retail store.
yes...her intention is to control what would be in the magazine. She wants to be editor.

The problem: The business is registered to me, the bank account is in my name and I'm financially and legally responsible. I told her that if she wants to control the business decisions then she would have to put it in her name. She won't do this because she would have to pay me to do the layout, pay a printer and a writer since she doesn't know graphics and she can't write. The only reason the magazine is making money is because I do all the production work and write the articles. In other words, I don't need her but she needs me. (She was not involved at all in the last issue)

Also, I invested start-up money, use my equipment and software. She invested NOTHING.

She is now trying to force me into making her a partner by threatening to destroy my reputation. (I have emails stating this) Isn't that extortion?

 

[JoshDom1898]

Well I think you should send her a certified letter that has a chronology of events and the discussions between you two, also if you have evidence that she is slandering your business, I would include that you have this evidence, then if she doesn't stop the defamation you will sue her for:

Tortious interference and unjust enrichment (you may have a case for extortion, libel, and/or slander) - but I would contact an attorney in your area and see what the best way to go about it is...but it's time to lay down the hammer in your case.

 

[njlisa]

Thanks. She is really driving me crazy. Good thing she acts on emotion https://forum.freeadvice.com/images/smilies/tongue.gif She sent lots of crazy emails!!!!!!