I have been a 40% shareholder of a 2 person subchapter S corp. since 1992. Since 1992, my K-1 has always showed income of over $150,000. However, the majority shareholder (MS) would pay my taxes only and keep the rest for himself. In this time, he has purchased 2 residences, refurbished his main residence to the tune of $1,000,000 (using company checks) and has formed an LLC to purchase our building as well as other properties. In 2006, I requested some of my equity in order to send my twin daughters to college. He promptly refused,saying he didn't have the money, and immediately hired an attorney. I have been in litigation since that time, (2006) and the MS won't buy me out or give me any money. Prior to litigation in 2006, I was debt free, including my house. Since that time, the following has occured:
- I had to take out a mortage ($120,000)
- I had to take out school loans for both of my daughters, current debt is now up to $240,000. My daughters were high school seniors when this all started, now they are college seniors. Repayment of this debt starts in 2010.
- I have accumulated over $100,000 in personal debt in the form of credit cards and checking account overdraft protection.
-the MS terminated my employment in 2007 including health insurance and I was left with no job. I've been working part-time at various $11-$12 per hr. jobs. (my wife works part-time.)
I have an attorney who agreed to work on a contingency basis due to lack of funds, however I am paying the price for this agreement. This lawsuit has been going on for 3 years and 4 months and my attorney won't even return my calls. My questions is- why can't I get my money? I no longer work there and am due my equity. Ironically, I am still a 40% owner but have not seen one stitch of paperwork since August of 2007. I have no idea as to the condition of my investment. Now, the IRS is conducting an investigation of my company and I don't think it will turn out well. The MS has ben taking out money as "interest free loans"to the tune of over $3,000,000. He hasn't shown any of this on his personal income taxes. My attorney said (awhile ago) that he is making a motion to remove him from the business. I just want to be bought out and move on. I am a "hostage" at this point in time, totally broke.Any suggestions?
- I had to take out a mortage ($120,000)
- I had to take out school loans for both of my daughters, current debt is now up to $240,000. My daughters were high school seniors when this all started, now they are college seniors. Repayment of this debt starts in 2010.
- I have accumulated over $100,000 in personal debt in the form of credit cards and checking account overdraft protection.
-the MS terminated my employment in 2007 including health insurance and I was left with no job. I've been working part-time at various $11-$12 per hr. jobs. (my wife works part-time.)
I have an attorney who agreed to work on a contingency basis due to lack of funds, however I am paying the price for this agreement. This lawsuit has been going on for 3 years and 4 months and my attorney won't even return my calls. My questions is- why can't I get my money? I no longer work there and am due my equity. Ironically, I am still a 40% owner but have not seen one stitch of paperwork since August of 2007. I have no idea as to the condition of my investment. Now, the IRS is conducting an investigation of my company and I don't think it will turn out well. The MS has ben taking out money as "interest free loans"to the tune of over $3,000,000. He hasn't shown any of this on his personal income taxes. My attorney said (awhile ago) that he is making a motion to remove him from the business. I just want to be bought out and move on. I am a "hostage" at this point in time, totally broke.Any suggestions?
