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  • Help! Business Partner is Trying to Bankrupt Company

    Charles created 5 days, 16 hours ago 0 Member · 1 Post
  • Charles

    Member
    September 11, 2019 at 7:04 am

    Throwaway for obvious reasons. Ok, so I have a federal corporation in Canada that focuses on resale and wholesale that is owned 50% with my business partner. He is officially the CEO and I am the Prez. A few months ago he got caught up in one of his other businesses and left myself and our staff to run the show by ourselves. His side project is not gong well and when he finally looked at our books after several months he found that we aren’t doing as well as he hoped. He is blaming myself and our staff for mismanagement, fraud and theft. None of these claims are at all accurate and we have recently had an independent audit to ensure the books are good, no problems were found. The problem is just a downturn in sales. After looking at our expenses and incomes he went completely off of the deep end. Nothing that we have done has at all been contributing to our current position or has jeopardized the business, in fact we have made some great strategic moves that just require time to pay off. However, as he did not make those decisions he feels he’s lost control and in combination with the stress of his flailing side project he is spiraling out of control. Even though we are 50/50 he has seized the bank accounts and cheque book and will not let anyone spend money without his written consent, which he is loathsome to give. Our creditors are threatening legal action if we don’t pay them soon. He also agreed to a 150% increase in our rent and agreed to backdate it to Jan 1 2019 (which I believe is illegal,and he did not seek my consent as per our partnership agreement). He is verbally abusive and demeaning to our staff and has on several occasions been yelling and throwing things in my office. He wants to tear down the company and is trying his best to bully me into doing whatever he demands. I was away on travel securing more business when this all went down a couple of weeks ago and I thought upon my return we could discuss it and get things moving forward. That didn’t happen and it’s gotten worse. Unfortunately I am not in a position to buy him out and he will not buy me out, so it looks like based on the decisions he is making now we will be insolvent in a couple of months. While we can easily turn this around (and we are) he has made up his mind that the business is doomed and he figures he can get the most out of it by bankrupting us and collecting what he can based on our investments and agreements. Is there any legal recourse or any recourse to his actions? What options do I have? We have a standard shotgun clause in our agreement but have it structured that the party who buys out the other must also buy out his preferred shares (equity + debt) and I can’t afford to do that else I would. Things are really bleak and my staff are rallying around me, but with the craziness of the office they won’t last much longer before they start leaving to find a normal job. I’ve built this company from the ground up and made a bad decision to bring him onboard, now I’m afraid I’ll be left holding the bag and forced out of the company and job I love. – by hq overview BusinessOrBankrupt – –

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