State of Arizona,
Management/Partnership services agreement broken by B-Co, pockets all revenues while A-Co eats up the expense, B-Co owes a substantial amount of cash to A-Co for breaking agreement.
A-Co began a partnership with B-Co in hopes of making B-Co's business more profitable because B-Co was in the verge of bankruptcy.
B-Co is in the business of automotive repair and collision, A-Co takes over the financial & day-to-day operations of B-Co while B-Co is conducting field estimates, sales and improving the efficiency of jobs coming into the repair shop.
1st Month: A-Co establishes an office on B-Co's rented property (B-Co owes $5500 to landlord + additional $6000 for pocketing sales from a Chevy Tahoe, will get to that later)
A-Co sets up a new CRM and automotive repair software to make estimating, invoicing, and accounting more efficient than before.
A-Co itemizes cost efficiency and utilizes where money need to be put and where it isn't needed.
A-Co and B-Co's accountants show a net loss of ($10,500) with a discrepancy <5%.
Sales was ~$17,000. A-Co demands B-Co to produce $1500/day to break even on the net. B-Co says it can do it but is yet to prove so.
2nd Month: A-Co shows revenue doubled from 1st Month with a whopping $35,000 in sales and a net profit of $2200 with both company accountants disparaging of less than 10% discrepancy on the numbers.
This is where it get weird, by the beginning of the 3rd month, B-Co gets greedy (and probably thinks it can manage itself without A-Co) and accuses A-co of witholding profit numbers from B-Co, impossible because B-Co has all bank statements and deposits that show a balance on each month's balance sheet! B-Co cuts financial ties with A-Co right at the time when A-Co paid for more than $10,000 in parts and supplies for jobs worth more than $16,000. B-Co pockets all revenues and doesn't disclose it to A-Co and asks A-Co to leave, rendering the agreement null, but B-Co cannot terminate the agreement without a 30-day written notice, which B-Co has get to provide.
A-Co goes talks with land lord and finds out information that B-Co has done this business malpractice in the past with other victims.
A-Co demands investment capital of $5600 + $10000 in credit line outstanding balance minus available balance in the account of $2200, equal roughly $13400 owed to A-Co from B-Co.
Is this fraud? Criminal? And if it is civil, how can A-Co go about to collect this amount owed from B-Co without B-Co filing for bankruptcy? Can A-Co go after the owner (individual) and collect criminal restitution?
A-Co has spoken to numerous attorneys who demand up-front cash of +$5000 and A-Co does not have the funds to hire attorneys unless they would take contingency. Very few attorneys who do contingency, A-Co has yet to find a firm.
Thank you. I appreciate you insights and expertise on the subject.
Management/Partnership services agreement broken by B-Co, pockets all revenues while A-Co eats up the expense, B-Co owes a substantial amount of cash to A-Co for breaking agreement.
A-Co began a partnership with B-Co in hopes of making B-Co's business more profitable because B-Co was in the verge of bankruptcy.
B-Co is in the business of automotive repair and collision, A-Co takes over the financial & day-to-day operations of B-Co while B-Co is conducting field estimates, sales and improving the efficiency of jobs coming into the repair shop.
1st Month: A-Co establishes an office on B-Co's rented property (B-Co owes $5500 to landlord + additional $6000 for pocketing sales from a Chevy Tahoe, will get to that later)
A-Co sets up a new CRM and automotive repair software to make estimating, invoicing, and accounting more efficient than before.
A-Co itemizes cost efficiency and utilizes where money need to be put and where it isn't needed.
A-Co and B-Co's accountants show a net loss of ($10,500) with a discrepancy <5%.
Sales was ~$17,000. A-Co demands B-Co to produce $1500/day to break even on the net. B-Co says it can do it but is yet to prove so.
2nd Month: A-Co shows revenue doubled from 1st Month with a whopping $35,000 in sales and a net profit of $2200 with both company accountants disparaging of less than 10% discrepancy on the numbers.
This is where it get weird, by the beginning of the 3rd month, B-Co gets greedy (and probably thinks it can manage itself without A-Co) and accuses A-co of witholding profit numbers from B-Co, impossible because B-Co has all bank statements and deposits that show a balance on each month's balance sheet! B-Co cuts financial ties with A-Co right at the time when A-Co paid for more than $10,000 in parts and supplies for jobs worth more than $16,000. B-Co pockets all revenues and doesn't disclose it to A-Co and asks A-Co to leave, rendering the agreement null, but B-Co cannot terminate the agreement without a 30-day written notice, which B-Co has get to provide.
A-Co goes talks with land lord and finds out information that B-Co has done this business malpractice in the past with other victims.
A-Co demands investment capital of $5600 + $10000 in credit line outstanding balance minus available balance in the account of $2200, equal roughly $13400 owed to A-Co from B-Co.
Is this fraud? Criminal? And if it is civil, how can A-Co go about to collect this amount owed from B-Co without B-Co filing for bankruptcy? Can A-Co go after the owner (individual) and collect criminal restitution?
A-Co has spoken to numerous attorneys who demand up-front cash of +$5000 and A-Co does not have the funds to hire attorneys unless they would take contingency. Very few attorneys who do contingency, A-Co has yet to find a firm.
Thank you. I appreciate you insights and expertise on the subject.
