Deadlock exiting CC

**Dave A** · 02-Jul-17, 11:04 AM

If mediation hasn't worked to break the deadlock, ordinarily the next "best step" is arbitration.

**Basment Dweller** · 03-Jul-17, 02:32 PM

Do you have shareholders/members/directors agreements? What did the two of you agree to if a dispute arises?

**Lilla** · 04-Jul-17, 05:50 AM

We have a partnership agreement that stipulates mediation and then arbitration. But arbitration for some reason in a different city??? How does one go about to start arbitration? Can I just skip that and sue the cc for the payment of my loan account which means the cc will have to liquidate in order to pay me. How is that different from me applying for liquidation?

**Lilla** · 04-Jul-17, 05:51 AM

Thank you for your reply.

**Dave A** · 04-Jul-17, 06:45 AM

Originally posted by Lilla

We have a partnership agreement that stipulates mediation and then arbitration.
...
Can I just skip that and sue the cc for the payment of my loan account...

Like it or not, you're in a contract that requires you arbitrate. Your question also indicates the possibility that you may not appreciate what arbitration is, or perhaps even that you're the unreasonable party.

It is an alternative, and ordinarily quicker and way less costly mechanism to obtain a determination in a civil dispute compared to going the civil litigation process.
You will be given the opportunity to present your case and views, and the arbitrator will make a determination based on the merits.

**Lilla** · 06-Jul-17, 07:00 AM

I just dont want to fight... at this stage I will just walk away to have my peace. All I wanted to know is if it is an option to take 1/2 of the assets if my partner refuses to buy me out. I have bent over backwards to accommodate negotiations and nothing is enough. I am just so tired and need this to end so that we both can move on with our lives. It is costing me money to go in to the office every day and I cant afford that anymore.

**Andromeda** · 06-Jul-17, 03:25 PM

Hi Lilla

I sympathise with you regarding this dilemma.

It is not an option to take 1/2 of the assets. That would be theft. She offered to pay out your loan account and in my opinion you should not reject that. Your claim to half of the close corporation's assets in my opinion is mystifying; they are not your assets, they belong to the close corporation, in the absence of a liquidation.

I would really suggest you consult an attorney to file for liquidation and follow his advise.

**Lilla** · 07-Jul-17, 09:50 PM

Originally posted by Andromeda

Hi Lil
I sympathise with you regarding this dilemma.

It is not an option to take 1/2 of the assets. That would be theft. She offered to pay out your loan account and in my opinion you should not reject that. Your claim to half of the close corporation's assets in my opinion is mystifying; they are not your assets, they belong to the close corporation, in the absence of a liquidation.

I would really suggest you consult an attorney to file for liquidation and follow his advise.

Thank you for your time, I really appreciate that.

Do I just walk away after 16 years and leave the business that I've helped to build behind with no part of the assets? My loan account is money that I loaned to the business or drawings that my partner took. She will only pay that out if I sign the 5 year 50km restraint of trade agreement which I cannot sign as I need to work from home (widow) to generate some income for myself.

I am told that if I file for liquidation it would cost a min of of R40 000 that I would have to pay and try to claim back later.

I just dont have the energy anymore...

**Dave A** · 08-Jul-17, 06:22 AM

Who knows how close you are to the finish line in this? Sometimes you've just got to find the energy to go the next mile.

**Justloadit** · 09-Jul-17, 08:07 AM

It could be your partner is counting on you giving up.
But remember if you file for liquidation, your partner will oppose, but this does not mean that it will end there, it just means that it will take longer to achieve this means.

A restraint of trade, is not a right your partner may force on you, simply because your partner will pay you off into the future, as what guarantee do you have, that he will pay, What recourse do you have, if he does not pay?

I am of the opinion, that you do not get yourself in a position where you can easily become a victim of a nefarious partner. Always negotiate so that your are always in a position of power and control. Always assume the worst when negotiating in these conditions, as people will promise anything to get what they want, fully knowing that they will not fulfill their statements.

Maybe it is time to visit a lawyer, who can advise a way to clear the situation.

In the meantime, how are your earning an income?
This at the end of the day is the most important part of any of your decision making, no income means that you will be in the dwang.

**Lilla** · 10-Jul-17, 06:30 AM

Thank you for your time.

Neither of us had the finances for a drawn out fight. The company is barely surviving financialy and we have not had an income for a very long time.

There is no way that my partner will generate the money to pay me off as we are not even able to generate extra income with both of us there. The draft contract that we have (and she refuses to sign because of the restraint of trade that she wants) has a clause that states that if she defaults the Whole amount becomes due immediately.

I have consulted with a lawyer and the only option he gave me going forward is to apply for liquidation at my own cost.

I have been tightening the belt since my husband passed away and living off my savings which is now almost depleted. I cannor afford to get into debt and that is why I have decided to leave and somehow try and generate an income for myself.

Is it an option for me to inform my partner that I am leaving and not remove myself from the CC? Am I then liable for the debt that the CC gets into? Can I sue the CC for my loan account and not apply for liquidation? What would need to happen then?

I am desperate....

**Justloadit** · 10-Jul-17, 07:57 AM

With out full information of your involvement in the C.C., and on an open forum like this, it is not the place to offer any kind of legal advise or any further information.
I suggest that you find a 'company acts' lawyer in your area, who you can then consult, place all your information at his disposal, and he can then make an informed decision.
There is no simple solution for your situation, especially when there is a difficult partner. She may be acting like this because she may feel threatened that her life is also going into turmoil, and her defense in her mind may be that she is trying to keep the company all to herself, and that will solve all her problems. So keep this is mind when negotiating.

Maybe do a Google search, or ask your accountant/book keeper to recommend a lawyer in your area.

**Lilla** · 11-Jul-17, 10:26 AM

Thank you.

**TaniaJvr** · 11-Jul-17, 03:59 PM

Hi Lilla,

I hope you have resolved this. IF not, here is my short answer. You have a few options. If you do not have some kind of co-operation agreement then you don't just walk away. You stay a member. If she succeeds, you still own half the assets. If you want to walk away, you can do so by applying to court on the grounds that it is just and equitable to do so due to the fact that there is no working relationship. You don't need to go all the way with the application. The threat to do so may be enough. She will also have to incur legal costs and at the end of the day she does not have the funds it seems to do so and therefore will negotiate.
Hope this helps.
Tania

Deadlock exiting CC

[Question] Deadlock exiting CC

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