Members loan payout

[JENI]

Hi, i have a question. I was a member of a CC for 12 years (owned 25%). In that time i loaned the company money which accrued to R200k as the company was continually struggeling. It's a family business. I've left the business due to a fall-out (as the other member would never take financial responsibility and also pay in monies when the company needed it) and the monies is still owing to me. On leaving i tried to get the Managing Member to sign an acknowledgement of debt, which she refused and said that she does not want to be held to a document that she cannot promise i will get my monies back, however that she would try and repay me by the end of the year. It's now been a year since and i'm no longer a member and i've not received one cent back despite the promise. What are my rights? Have I relinquished my right to get my monies back that i loaned by selling my shares or am i still entitled to take the remaining member to court. Ps. the managing member is my mother and i would assume that her word would have been good enough, however i've been seriously let down. The remaining managing member has now bought a house with company funds (so they company must be doing well). What should i do?

[Dave A]

Please tell me you have something in writing relating to the sale of your interest. A proper sales agreement would be first prize, but minutes of a meeting... something.

Please...

(I really need to add a begging smilie)

[JENI]

Hi, i have no agreement relating to the sale of my interest whatsoever. No minutes. All we agreed upon verbally was that i be paid out my shares value and i asked for R20k as i bought the shares for R16k. The rest was all verbal discussion regarding the repayment of the members loan and i had somebody with me as a witness. As i mentioned this is family and i did not protect myself because of this fact. I've got a very uneasy feeling i should have. When i got paid the R20k on the sale of my shares, i signed amended CK documents. Have i made the biggest mistake of my life?

[Dave A]

On leaving i tried to get the Managing Member to sign an acknowledgement of debt, which she refused and said that she does not want to be held to a document that she cannot promise i will get my monies back, however that she would try and repay me by the end of the year.

.....
Ps. the managing member is my mother

That's the bit that troubles me. It's a clear sign that your mother had already rationalised away a clear sense of duty to have the loan account repaid.

Look, you can sue the cc, and eventually that would bring legal clarity to the situation if nothing else. But with it being family, especially your mother, you could well be better served by taking a solid shot at resolving it between the two of you. You just have to keep an eye on prescription (3 years), at which point you'd lose the option of taking legal action if it comes to that.

Has the topic of the debt come up at all in the last year or so?
How is your relationship with your mother?
Is the business definitely in a better position to pay something towards the debt now?

If the subject hasn't come up in the last year, I'd actually recommend a very direct approach, as in "Hey mom, when can I expect a payment towards settling the loan account?"

Don't worry about getting all of it - just get something. That would already be huge progress. There's a mental switch that needs to be flipped here. Achieve that and you should be well on your way.

Have i made the biggest mistake of my life?

This one is certainly not as big as some I've made. And probably not as big as suing your mother

Don't let it get you down. It's only money.
There are lots of things which are far more important.

[JENI]

Hi Dave thanks for the advice. I will give the "Hey mom..." thing a try...lol...will see what happens. I was told by a reliable source that the company had bought a house and i did a deed search and it gave me the information on how much the property was bought for, what the bond is on the property and what the deposit would have been, plus taking into account the transfer duty that would have had to be paid...i worked out the company paid R320k towards all of this and there was no microfilmed amount so this was paid out of the company coffers...anyways, like i said i would give your advice a try and if all else fails go the legal route.

[CLIVE-TRIANGLE]

Your other option is to file for the liquidation of the cc. The sale of your interest is but a fraction of the loan account.