Business Screwjob. Flames Welcome! Advice a Bonus.

[LeVoodoo]

I know this is the last place that I should be asking this question, so I deserve all of the verbal thrashing that I am likely to receive. But frankly, there are enough retarded threads on this forum and another probably won't hurt. Don't be shy though, I have been incredibly stupid and I deserve it. If I just get one pertinent answer, I'll be content.

Here's the story.

I started a business by myself 16 months ago. Soon after it started, I brought in a lifetime friend (from childhood) to work with me at 50%. I had known this friend personally for years through my teenage years, then he moved to Raleigh. For the first three months, the business operated out of Canada. I was the sole owner, he had my word I would give him his cut and that was all. After three months, we transfered the company to the US for business reasons. We registered the business in the states. This time, he was the sole owner, our agreements were again verbal (I'm sure you see where this is going).

Time goes by, the company is small, but earns more than enough for a pair of 20-something year olds. I made enough to pay my bills and then live, I was happy with that since the business was low maintenance. Then I started school. School was just too demanding for me to do both business and study, I decided that school was more important (Yes, I do make a smart decision on occasion). I wasn't letting the company go for nothing. I had put alot of time into it over the past year to build it into what it had become. So, I sold him my 'share'. He was to pay me $X amount for 12 months, in addition to clearing the Amex business card which was under my name. The agreement was verbal, once again. I know this probably sounds like the stupidest thing one could do, but I trusted this person like a brother, and payment was never an issue in the past 16 months.

It's been three months since the 'transaction' took place. I am informed that the money is better spent elsewhere and that the installment I receive on the 1st of July will be the last. This means I will have been paid only a quarter of what I was originally promised. Nice guy that he is, he will still make good on paying off the Amex.

The only proof I have that this payment agreement even took place are chat logs (saved and captured), emails (saved and captured) and the first four checks I received. The agreement was verbal, but there is no recording. There is no contract or formal agreement. Should I just drop it and consider it a lesson learned? The sum of money is not trivial, the outstanding debt is still in the low five-figures, but Poker is providing very well for me and I will be able to survive without it. I do, however, want what is rightfully mine, and if I have any recourse, I will take it to the furthest extent out of principle.

Clearly, I was retarded. All of this could have been avoided with proper documentation of both business ownership and buyout agreement. Do I deserve what happened? Yes, I probably had it coming. Question is, can I do anything about it or would I be wasting my time.

[Chairman Wood]

Judge Judy man...

[LeVoodoo]

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Judge Judy man...

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Awesome. Posting this was already worthwhile. Thanks.

[DavidC]

Talk to a lawyer in the states and canada, see what htey have to say about it, in terms of the legality of the case and the jurisdiction that it falls under.

Bring printed copies of chat logs / emails to your meetings.

Make notes before you show up.

These guys can be pretty expensive to work with, so try to make sure it goes smoothly.

Sorry to hear about this situation, bro.

OOC, what was the business all about?

--Dave.

[jakethebake]

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OOC, what was the business all about?

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I'm guessing gay porn. Without two of them, the "friend" just couldn't make a go of it.

[AnyAce]

I agree with other poster. Collect as much documentation as you can and consult a lawyer, ideally it would be a friend who could give you a quick & dirty read on whether you have a leg to stand on for little or no money.

I am not a lawyer, but my recollection from the legal classes I took in my MBA program is that in some cases verbal agreements are binding.

I would search the 2+2 forums for legal type posts (I seem to recall that during the periodic debates here about how much you can make playing poker vs a "real job" lawyers frequently chime in).

The threat of a lawsuit might be enough to get you a settlement.

Good luck.
AA

[Bulldog]

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The only proof I have that this payment agreement even took place are chat logs (saved and captured), emails (saved and captured) and the first four checks I received. The agreement was verbal, but there is no recording. There is no contract or formal agreement.

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First, yes you are a huge idiot. If 75% of your half is what, $15,000, the business is worth at least $40,000. You have a $40,000 business, and you aren't putting these huge transactions in writing?

Second (IANAL), verbal contracts are binding. You certainly could argue that you had a valid contract, and even if your ex-partner lies about it, you have some evidence to make your case. Contact a lawyer, and file a claim.

[slickpoppa]

Talk to a lawyer. Just because the agreeement was oral doesn't mean it is not legally binding. Hopefully you have enough evidence through the emails and chat logs to make a good case.

One thing you should consider, though, is whether he has the money to pay you if you win.

[djoyce003]

verbal contracts are legally binding, provided there is some proof that it actually existed. There are various rules, but if the contract can be fullfilled within a year, (which this one can) and it doesn't involve real estate, verbal is usally ok.

Also, if you sold your half for one year of payments you also got robbed. Business are typically worth 3-5 times cash flow, so your share should have been 3 years of payments at a minimum. If you were doing work that he had to hire someone to do, then you could reduce it by some amount, but you let him off cheap and then he screwed you.

[Arnfinn Madsen]

If you want to be successful in business, you will never have the time to put all important agreements into formal contracts since time is your most precious asset, so I don't consider you lame. In addition many will find you nitty if you always do that and prefer to do business with others than you and then you end up with second best partners.

So important is to know who you can trust. Obviously that was where you failed. The easiest paths to solve it goes through psychology. You could i.e. make a sentence like this:

"I had such an interesting time with this business and cooperating with you, it is a pity that it ends up with me feeling cheated and our friendship destroyed."