Can I sue my previous employer, who went out of business for an unpaid investment I made with his company?

You refer to your payment to your former employer as an investment, but with a pure investment, the investor takes the risk of a loss - if your Apple stock goes down, it's your bad luck.  What you describe sounds more like a loan, or a hybrid of the two.  If you loaned your former employer money which he has failed to repay on time, you can certainly sue him for breach of the contract.  However, unless the contract specifically provides for an award of attorneys' fees, or you are able to bring your case within the parameters of some statute which provides for attorneys' fees (unlikely), you will have to bear your own costs, although, if you win, you will probably be awarded interest.  Unfortunately, from the circumstances you describe, it seems very possible that your former employer does not have the money to pay you, and that you will not be able to collect even if you obtain a judgment.  Thus, you should be careful about spending too much on an attorney unless you are sure that the defendant has the means to satisfy any judgment.  You may want to consider handling the matter yourself, or hiring an attorney who will handle the matter on a contingency basis, so that you don't have to pay anything if you don't collect.  Another option may be to file an involuntary bankruptcy action against your former employer, where the court would supervise the distribution of his assets to his creditors.  However, depending on the number of creditors he has and other factors which I have no way of  knowing about, this may not be possible. Also, although you write about your former employer as "he", in many cases the employer is "it", i.e. a corporation, llc, or some other legal entity.  Even though "he" may own the entity, "he" may not be personally liable for its obligations.  In other words, if you loaned money to a corporation, and the corporation has no money, you may not be able to collect even if the owner of the corporation does have money to pay you.