marcricker
New Member
My jurisdiction is: Colorado
Last October I was looking to expand my business and ran across a company with a similar model that wished to form a partnership to "combine forces" and move forward together. This company was comprised of several experienced business professionals and expressed they had the knowledge and experience to help take what I was building to the next level. After our initial conversations, I stressed the importance of an operating agreement if we were to actually pursue this relationship. There are several emails from myself requesting this agreement be drafted and signed. However, this was never completed by the other party. I made it clear that we would work towards forming a definite partnership but until the operating agreement was in place, I would not commit to anything. Since this time, we have attempted to continue moving forward to create this relationship, but other issues have arisen. The other company has not followed through on any of the promises they made and still no agreement. They did set up new LLC's which we were to switch the business over to, and the dba for the business is under both the new LLC and my old LLC. The first week of May, after no promises had been met and the company had not followed through on a single commitment made, I informed them I would no longer like to pursue working towards setting up a partnership and would assume all liability for the company.
Since I never committed to a partnership and have notified them that they have defaulted on our initial agreement to pursue a relationship, what should my next action be? I have submitted a dissolution agreement to them, noting that I will assume the liabilities, including office space, leases on equipment, etc. They are now requesting money from the company and for me to compensate them for certain items they had given me to use in order to attempt and build the relationship. I have no problem returning the couple of paintings and desks they provided, but now they are threatening to sue and many other threats have been made. Their company is now in serious debt after a bad season and they are trying to get as much out of me as possible. I had a profitable business before speaking with them and they lied about their business to make it look more appealing for me to work with them.
I have definitely made mistakes on my end, by not requesting financial statments before attempting to move forward (even though I recently found out their financial statements are completely fabricated anyway), and certain lessons have definitely been learned. Being that I am only 25 and the other business owner is in his late 50's, I feel as if he were trying to take advantage of me from the beginning. Not only have his former employees approached me to express their concern, but now he is claiming that we have a 95/5 split on our business if we were to move forward. I have a profitable business, he is $1m in debt and has never shown profit, has lost all of his employees, but still requests 95% of the business ownership.
I just want to be done with this guy, but his threats are making it seem he is not going to go down easy and even though there is no money to be had from the business, I feel as if he has taken a personal interest in making my life more difficult. Not to mention, there are several of illegal acts he has been committing, and has committed several over the past few years that make it impossible for me to engage in any type of relationship with this guy. Everything from tax evasion to mortgage fraud.... I just can't be associated with this guy anymore.
How do you recommend I handle this situation?
Last October I was looking to expand my business and ran across a company with a similar model that wished to form a partnership to "combine forces" and move forward together. This company was comprised of several experienced business professionals and expressed they had the knowledge and experience to help take what I was building to the next level. After our initial conversations, I stressed the importance of an operating agreement if we were to actually pursue this relationship. There are several emails from myself requesting this agreement be drafted and signed. However, this was never completed by the other party. I made it clear that we would work towards forming a definite partnership but until the operating agreement was in place, I would not commit to anything. Since this time, we have attempted to continue moving forward to create this relationship, but other issues have arisen. The other company has not followed through on any of the promises they made and still no agreement. They did set up new LLC's which we were to switch the business over to, and the dba for the business is under both the new LLC and my old LLC. The first week of May, after no promises had been met and the company had not followed through on a single commitment made, I informed them I would no longer like to pursue working towards setting up a partnership and would assume all liability for the company.
Since I never committed to a partnership and have notified them that they have defaulted on our initial agreement to pursue a relationship, what should my next action be? I have submitted a dissolution agreement to them, noting that I will assume the liabilities, including office space, leases on equipment, etc. They are now requesting money from the company and for me to compensate them for certain items they had given me to use in order to attempt and build the relationship. I have no problem returning the couple of paintings and desks they provided, but now they are threatening to sue and many other threats have been made. Their company is now in serious debt after a bad season and they are trying to get as much out of me as possible. I had a profitable business before speaking with them and they lied about their business to make it look more appealing for me to work with them.
I have definitely made mistakes on my end, by not requesting financial statments before attempting to move forward (even though I recently found out their financial statements are completely fabricated anyway), and certain lessons have definitely been learned. Being that I am only 25 and the other business owner is in his late 50's, I feel as if he were trying to take advantage of me from the beginning. Not only have his former employees approached me to express their concern, but now he is claiming that we have a 95/5 split on our business if we were to move forward. I have a profitable business, he is $1m in debt and has never shown profit, has lost all of his employees, but still requests 95% of the business ownership.
I just want to be done with this guy, but his threats are making it seem he is not going to go down easy and even though there is no money to be had from the business, I feel as if he has taken a personal interest in making my life more difficult. Not to mention, there are several of illegal acts he has been committing, and has committed several over the past few years that make it impossible for me to engage in any type of relationship with this guy. Everything from tax evasion to mortgage fraud.... I just can't be associated with this guy anymore.
How do you recommend I handle this situation?
