QUESTION
I made a series of personal loans to a friend and would like to change it to an investment in a project he is financing.
Asked on Mar 19th, 2015 on Contracts - California
More details to this question:
Following the 2008 crash, I supported a friend and his family with semi-regular small loans (no interest, pay when you can) to keep them afloat. Over time this debt has added up to a considerable amount (more than $50k). Now he works financing and making motion pictures. The idea is that rather than paying me back directly, this money could be used as an investment and I would earn the interest and equity associated with it. I am not overly concerned about the money involved (it is as much about making it easier for him to repay as anything else) but I want to make sure everything is above board on my end. For example, do I need a contract that discharges the loan debt in exchange for the investment? Are there reporting requirements? Thanks.
1 ANSWER
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Doland & Fraade
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If you want to make sure you are never paid, roll over the money into film finance. How you "satisfy" the "loan" you made (and in the absence of any writings, it could be argued these were all gifts) will depend on what type of writing you have.
Answered on Mar 19th, 2015 at 2:23 PM