[debnow]

I am a business partner in a corporation with one other non-related person. I am known as the silent partner investing a huge amountof money to start a business. The partner operated the retail business. It showed a loss for the first yr and I invested more in the second yr. Sales were way down and again lost money. When a supplier called me to say his cheque was nsf I called the bank for an a recent statement. I saw cheques written for non business related expenses as well as debit card purchases and withdrawals. We initially signed that there would be no debit card and that 2 signatures were required on all cheques. All of these cheques had only his signature. He had requested a debit card and got it. I went to discuss the statement with him. He did not deny nor could he explain the cheques/transactions. I told him I would be looking into a forensic audit. Within a week the doors were closed. I never had keys to the business. I couldn't get ahold of him by phone or going to his door. I contacted the company lawyer to request a meeting. He did attend and it was decided on that the business now closed be put up for sale. I made arrangements to meet him there to do an inventory/clean up. He did not show up. I have not been able to contact him since. It has been more than 4 weeks. I have now heard he has moved to another prov. His house is for sale and empty. I contacted the real estate agent today and with him went into the business. It is a shambles. It looks like it was abandoned in the middle of the night. All inventory is gone. Fixtures are in place but the computer is gone and there are several empty file drawers. There are papers everywhere, including unopened envelopes, some older inventory in a disarray. The phone was disconnected several weeks ago but there is power and heat. The mortgage is in arrears. The bank account has about $40 in it. Junk all over the floor.. hardly in the shape to be resold... the agent said he asked him to clean it up and I agreed that what he did was clean it out. I do not know what my next move is. I can prove he used business funds for personal use and when I confronted him he locked the doors and bailed. I have contacted the RCMP but they said they really can't charge him with fraud. I contacted Revenue Canada and they are getting back to me. I have had numerous calls from collections and from suppliers who have post dated cheques. I asked the bank to freeze the acct. What recourse have I got to ensure I am not held responsible for the mess created? I have no books.. no proof of anything.. except that I lost a lot of money. How do I go about closing and finalizing this fiasco.. and disolving the company. I want nothing more to do with this and haven't for more than a yr when he said he would buy me out but when I presented the statement of what I had invested he never got back to me. Believe me there is a question in here... I am full of questions.. where do I start to end this?

[excon]

Hello deb:

You don't want me to start with all the things you did wrong. I'm sure you'll be beating yourself up about that stuff for a long time to come.

Your situation isn't as complicated as you may think.

The first thing you need to do, is hire an attorney AND a CPA. One or the other can close the business. I doubt you'll need to file bankruptcy. Assuming you incorporated correctly, and you didn't sign any personal guarantees, when the creditors find out that there's no money and nobody to go after, they'll give up. You are NOT liable for company debt.

The business is NOT worth anything. Hold a garage sale for the fixtures. That's all you've got.

I think he IS guilty of a criminal offense. If the cops won't go after him (I didn't know Canadian cops loved doughnuts too), your lawyer will speak to them.

Then, if you think he has any assets you can get, you need to find him and sue him.

excon

[debnow]

Thank you for not coming right out and telling what blind fool I've been. I trusted this partner to be of some integrity. I basically have no money left to hire anyone. I have gone to the RCMP and also to my local MLA for some direction but have not received anything.

Yes, I did sign personal guarantees. First for the Line of Credit at Conexus. I am in the process of taking them to Small Claims Court... I served them with a Demand letter and when their lawyer called me said I will lose in court because they have all the legal paperwork in order and even though they may have erred, legally they are correct and the judge rules on legality not morally. I secured 50% of the $50,000 line of credit.. as did he. And guaranteed $25,000. I used bonds that were joint with my 2 kids.. who had no involvement or knowledge of the company of this loan. The bonds were 2 - $15,000 bonds. When conexus terminated the loan they took all my $30,000 and $20,000 plus about $500 interest from the partner stating that I had signed for $25 and each of my kids signed for $12,500. Which according to the documentation is correct. When I went in and asked the loans manager how this happened he admitted he may have erred in sending the incorrect documents to my kids but they did sign them with leagal council. Yes, they did, because I called them and told them that they would be rec'g sign off paperwork from
You allowing the joint bonds to be held for security on this loan. My kids did not know these bonds existed, nor had they any knowledge of the company I was involved in. They signed because they trusted me and I trusted the bank to send out correct papers. When I called several weeks later to see if the bank rec'd the signed papers from my kids they said yes, evrything was in order... now had I known that they signed the same loan documents that I had I would have gone in there and demanded a correction be made before this went to termination... I would not have given my kids names and addresses if I had not trusted that the bank was sending out proper papers.. it is still the same 25,000 that I was guarenteeing not an additional $25.. so now the bank held a total of $75,000 security... and their lawyer said it is not uncommon for several people to sign for security... now why would I be willing to sign for $50 when I was only guareenting $25? So when it came to terminate they said my partner did have $25,000 of term deposits but they choose to use $5000 of it on another debt he had with them... and since they knew they had signed documents for $50 from my end... they took all my $30 and told me I should be thankful they didn't come after me for all of it.. since they have easily done that.

I also personally guaranteed and signed for the building and property that was purchased for the store. That is now in default and they will take back the building if it is not sold. The fixtures will have to be auctioned or sold for liquidation.

I also allowed the store to use my personal credit card when he wanted to make purchases from the states and they required a credit card. He told me he did not have one with any available amt on and assured me to give him the statement and he would pay it. Payments for the first few months were made but in 2007 the charges were over $13000 and every time I presented a statement he said there was no money. He gave me $100 in Oct. and $100 in Nov. and that was all.. saying that after Xmas there should be enough to pay if off.. when I went in Jan he said there was no money... a few days later I rec'd the call from a supplier whose cheque was nsf... and that's where we are today. I cancelled the credit card last July when I saw he made more purchases even after I told him no more purchases were to be made until I got a payment.

I also re-mortgaged my house to initially put $50,000 into the company account. When I did this he told me I would get my money back in less than a yr.. with interest.. it was a win win situation... I have never received a dime. I often purchased "out of pocket" expenses, such as office supplies for which I never got paid back. I purchased some retail items for resale and even though they sold I never got paid for them. I purchases show room décor such as plants, pictures for which I never got paid.

He has put his assets, van, car, camper all into his wife's name. He put his mobile home up for sale. He also owns a hotel/bar/resturant which he said he sold to his son but as soon as the jewellery store closed the hotel closed and is up for sale. There were cheques written for expenses for the hotel... he cannot be reached by phone... and he has moved to manitoba... and they are living with a friend from what his son tells me... making sure he cannot be found or traced.

I know I will never financially recover from this. It has left me distraught and a nervous wreck... it seems I am spinning my wheels in what to do so it does not cost me more.. if nothing else I want people to know what can happen in business relationships... I just want to ensure I do not have to lose more.. I am struggling daily.. this was supposed to be a nice retirement income in a few yrs.. and now I'm going to have to work many many yrs to get myself out of this debt.

It feels better to just know that someone else is listening.

Thank you.
Deb

[excon]

Hello again, Deb:

Well, the next time you go into business, you'll know what NOT to do. I lost money in the first 5 business's I got into. You'd think that was enough... But, noooooo. I had to do it again...

I made a jillion the 6th time. You will too.

Even though you have no money, I think you'll be dollars ahead if you hired a lawyer anyway. Assets held by your partners wife SHOULDN'T be exempt from seizure if you sued him. Plus, I think you need to get the bank situation straightened out for your kids sake.

If you hire a lawyer, don't hire a nice guy. Ask him if he's mean as hell.

excon

[debnow]

I don't usually get the best lawyer in these cases... my divorce several yrs ago to end an abusive marriage of less than 5 yrs cost me over $100,000 not including the alimony I had to pay my ex for 6 months... because he quit his job and was on uunemployment.. and yes, I had a job! Even though my lawyer said he could take his lawyer was a cow and he'd be putting her out to pasture... blah.. blah... I was the only one who everyone else fed off!

So for right now, I am in the process of doing a small claims court action against the banks lawyers.. even though he called me yesterday to say I am going up against him and I will lose... the judge will rule on the legality of the documents and not on the moral issue of incorrect paperwork... the fact was that they signed in witness oflegal representation.

I feel I was misrepresented false information. At no time were documents sent to me to inform me that my kids also signed the same documents that my partner and I did.. had I known that duplicate loan papers were sent to my kids I would have pursued to have this corrected at that time. Why would I allow my partner to sign for $25000 and between me and my kids sign for $50,000 of a $50,000 loan... how does that make sense... yes, they withheld that from me... yet I had every right to know.

At no time did they send me the documents stating that the loan was now closed and how the funds owing were paid for. I have no idea as to where the interest for my term investments went to either. This has all been withheld from me.

I know this will be a long and drawn out issue and they will flim-flam me with all their legal jargon.. because this is NOT what I initially understood and signed for or I would not have signed. The loan manager agreed and admitted he made an error but what is.. is. We'll see about that... how can this not be seen as wrong doing?

I'm not so sure I want to be in business with anyone... if there's another opportunity out there for me.. I'll be going it alone! I know I can trust ME!

Thanks, excon... maybe we'll meet on the other side one day!

[mickcharles]

I could have been able to help you. But it's unfortunate, I just signed up to this site.
Guess it's too late

[excon]

I could have been able to help you. But it's unfortunate, I just signed up to this site. Guess it's too late

Hello mick:

Yes... Go on...

excon

[mickcharles]

It is always important to have a plan B when you are having a business deal with anybody.
I'd always wanted to have business partners that have a brilliant business ideas that can be invested in. This is how I make a living aside my bank job that really does not give time for other activities. All I do is provide the capitals for various businesses. Presently I'm involved in about 11 business deals with different partners that we signed agreement on a trusted ground. I'm still hoping to get more. You can not just depend on one business deal... when troubles come it will really weigh you down.

[excon]

Hello again, m:

And, that would have helped deb, how exactly?

excon