Is there recourse?

[PA Schwhi]

Oklahoma - My mother, her brother and sister obtained a small business loan to purchase a convenience store a few months ago. My mother held the substantial colladeral - home, land, life insurance. In addition to the loan both my mother and her brother have put in between 20 to 40 thousand a piece while the other sister has contributed nothing. The other sister is now going to outside sources trying to find a buyer for her share which she is valuing at $20,000. My mother and her brother has told the other sister they would buy her out and to determine that price would consider the loan, personal expenses and the non-existant profit. The sister says no to everything and will not sign anything for bank purposes, she does not show up to do her share at the store which places double work on both my mother and her brother. Is there anything they can do to get her off the loan? If and when the store does make a profit she will be reaping rewards for something she never contributed to.

 

[lawrat]

You don't mention anything about labor contributions. Did any of them having written agreements? Set up a corporation? etc?


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[PA Schwhi]

When my mother went to the state to set up corporation papers, she set up a sole proprietorship (on the state's suggestion). This corporation name is also on the loan.
As far as labor, they all had verbal agreements to share in the work, without pay, until the business made a profit and they could afford to hire help. At the onset they all worked, in addition to family members, day into night to prepare for the opening. After opening they all worked shifts, until the other sister decided she wanted time off and slowly started cutting her own hours until finally she does not show up at all. But the only agreement they had was a verbal one, nothing in writing.