Corporate Law S Corporation /

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stampedenc

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S corporation based out of North Carolina
Im 33% owner of S corporation ( 3 partners total)

Situation
1)partners A and B decided it was time to buy a building.
2)Partners A and B went through and did a SbA loan.
3)SBA requires that any partner with over 20% ownership require to be on loan
4)partner c (me) has a messy credit problem due to a divorce and would not pass SBA requirements.
5) partners A and B went and got loan showing that partner C only owned 19 % of company.
6) partners A and B used S corporation money to pay for down payment , inspections, remodeling , and earnest money
7) new building is 100% in partners, A and B names, which partner C doesnt mind as long as money used for building is either payed back now, or distribution to partner C for the same amount.
8)Partners A and b contend that Partner C is now only a 19% owner of S corporation.
9) partners A and B have added an amendment to the buy sell agreement, it states that partner c is a 19% owner. It has all of our signatures plus one witness, no date is by the signature, signatures is on a page all by itself, and the date of the amendment is for jan 1, 2007, in which partner C was not even in town. basically any information could have been stuck in front of the signature page. No pages are numbered and no initials on any pages, however it makes it look like partner C signed, It is partners C signature, but was signatures for different forms. Partners A and B also turned in a "articles of incorporation " into SbA (exact information on documents except title of document was renamed) using exact same signature page.

Questions

A) Does the documents have a chance of being held up in court
B) Can partners A and b be charged with embezzlement of funds from S corporation for personal gain
C) Does the SbA loan constitute fraud for getting a loan and how will that affect partner C if it does. (partner C had a general idea of what they were doing and didnt say anything or do anything)
 
You're all between a rock and a hard place. You and your partners might as well settle your differences because it doesn't bode well.

1) Did you sign your name on those papers, regardless of the date?
2) Did you know that someone else signed your name on those papers on the amendment?

You might have ratified that agreement by doing so, although what was the consideration for you having 19%?

3) A&B might be subject to a charge for fraud, but I'm not sure. If you consented to the changes, regardless of whether you actually put pen to paper, you've got a problem. At the end of the day, I'd guess that they would be in hotter water than you since they actually went ahead with the loan via potential fraud. I don't know.

Bottom line - I am missing a LOT of factual information here and am giving only a general thought on what you wrote. If you went through with this sham, you may have a challenge coming to a court with "unclean hands" to rectify their later bad deed.
 
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