Close Corporation - Member interest dispute

[Samual]

Thank you all for the advice and kind words of support. Ultimately i am responsible for allowing this to get out of hand.

The business is due for a big share payout in 9 months time. If i give up now, i stand to lose out. If i stick it for 9 months, i still have a fighting chance to the payout.

I have decided on the following:
1. I will setup a meeting to discuss the poisonous relationship and the way forward
2. If things turn sour again, i will approach a lawyer for advice on the best way forward (i'd prefer not too due to the costs involved)
3. If there is no winning chance for me, i will sell my interest in the CC with first offer given to my partner.

In the interim, do any of you know of a great lawyer with extensive knowledge in Close Corporations and is reasonably proced?

[desA]

What about dividing up the CC's assets between the two members? Then each goes on their way.

I sincerely doubt you will ever see a penny of this 'big share payout'.

[Samual]

What about dividing up the CC's assets between the two members? Then each goes on their way.

I sincerely doubt you will ever see a penny of this 'big share payout'.

I doubt my partner would want to split the assets. All the issues started when the payout amount was revealed. That alone implies that he will not budge until the payout. But the business gets the payout so even he tries, we still have an interest in the business which means he will be liable to distribute accodingly

[desA]

^ It surely sounds like he is your Boss. You do not appear to be acting as a partner, I'm sorry to say. You appear absolutely & utterly afraid of the person.

Assert your rights & lay claim to your 40% of the business. Otherwise, live with the consequences of the hijacking.

[Samual]

^ It surely sounds like he is your Boss. You do not appear to be acting as a partner, I'm sorry to say. You appear absolutely & utterly afraid of the person.

Assert your rights & lay claim to your 40% of the business. Otherwise, live with the consequences of the hijacking.

Hi desA

Thats exactly how it was hence i am fighting him on it now. It is also the reason I am looking for an experienced lawyer who specialises in business agreements (and the CC act) and will be able to advice me on what my 40% interest in the business grants me.

[desA]

Fleecers (attorneys) will probably offer very little real solutions - other than protracted & expensive court settlements.

You need to play hardball with the Hijacker & assert your rights. If there are assets, then go in & lay claim to them - even take some to a safe place, until the matter has resolved itself. Let him cry blue murder (he will!). In SA, possession is 9/10 of the law - as most people see it.

There is good reason why most people don't attempt to negotiate with hijackers.

If you try to follow so-called SA law, you will be screwed by both hijacker & his/your fleecers. He will use your money against you!

Alternatively & very effectively - ask your fleecer to apply for an urgent Liquidation Order!

[Greig Whitton]

Fleecers (attorneys) will probably offer very little real solutions - other than protracted & expensive court settlements.

You've obviously been burned in the past, but please don't tar an entire profession with the same brush. There are good attorneys as well as bad ones. I personally browse documented judgments from all of our courts every week, so I know that people successfully exercise their legal rights in this country all the time.

You need to play hardball with the Hijacker & assert your rights. If there are assets, then go in & lay claim to them - even take some to a safe place, until the matter has resolved itself. Let him cry blue murder (he will!). In SA, possession is 9/10 of the law - as most people see it.

This is terrible advice, tantamount to theft. Skirting the law, let alone flagrantly disregarding it, does not help Samual's position. If anything, it could make things substantially worse. Samual has clarified that his partner owns 60% of the business and, by law, is entitled to considerable autonomy due to the absence of a member's agreement. If his partner is wielding that autonomy legally, then misappropriating the CC's assets could have severe repercussions for Samual (including civil damages and jail time) should his partner pursue legal action.

Samual - if you want reputable legal advice then please PM me and I will respond with the details of an experienced attorney who I recommend highly.

[desA]

^ Greg, you are welcome to your views. Practically, the legal profession in SA is essentially useless against business hijackers. (Discussed to death on another thread).

The 60% partner appears to be in the process of taking/commandeering/stealing/whatever the 40% partner's assets/rights/income/whatever. The legal system in the current SA climate, serves little use here - sadly to say.

Only at 75% control is virtual autonomy unchallengeable - not 60%. So, the fact that the 60% hijacker can do whatever he wants - with full protection (criminal & civil) against the poor 40% fellow who attempts to assert his 'rights' - is all well & good, then? Nonsense all round.

If this 60% takes all approach is correct, then absolutely no-one should ever go into partnership in SA. The society is grossly immature & immoral in these matters.

[Dave A]

You've obviously been burned in the past,

As I understand it, very recently. I think the scar tissue is still fresh.

[desA]

^ Absolutely.

What sadly ends up happening in this kind of matter is that the hijacker follows a 'slow coup' process, with the unwitting minority partner being duped into believing against all hope, that all is well. By the time he/she begins taking matters seriously - it is generally way too late.

At that juncture, better to capture certain key assets & have these moved to a secure location - even giving the 'keys' to a reliable third party. See how far the hijacker will get in the criminal system, when his junior partner stands up for himself. At that point, your negotiating position is far stronger.

The so-called Legal System we grew up with in SA - is dead & buried. If you sit with well-experienced fleecers, even they will admit, in private, that anarchy & lawlessness has overtaken SA's courts & legal system.

The only way to survive in SA is to always have a few tricks of your own, up your sleeve. Exercise these, as required - if necessary.