QUESTION

recently divorced, but still in parternship w/ ex husband. Business we have will be dissolved next week. I suspect he started another business

Asked on Sep 07th, 2011 on Business Law - Minnesota
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but has been using the equipment, buildings, etc. that hasn''t been settled yet. I make payroll to 3 employees that I think they are working on new contracts with this new company. How can I find this out?
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1 ANSWER

William/J Joanis
If a partner is diverting business opportunities, it is a actionable. It is one thing to stop operating a business because it lacks capital to proceed, and for the former owner to then continue in the same line of business (that is what they know about, after all), with new capital, etc.  But using the old business to act as a substitute for capital for the new business is fraud, unless very carefully done.  If the old business is being formally dissolved, you have rights of an accounting that should explain what is going on.  If the workers are doing work for the new business and using equipment from the old business, you need to claim your  ownership in the new business, as it is a continuation of the old, and essentially capitalized by the old business as well.  Depending upon the timing of the divorce, there may also have been a failure to disclose.  Find a good law firm with experience in business law (and hopefully family law, as well as business closures), that will sit down with you and see if there is something that can and should be done, and determine what the cost will be.  Lots of firms, like ours, do not charge for the initial consultation, and they don't commit you to using their firm if you decide to proceed. Good luck.  
Answered on Sep 11th, 2011 at 2:07 PM

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