QUESTION
How do I get rid of a bad co-founder and a bad consultant?
Asked on Feb 24th, 2014 on Corporate Law - California
More details to this question:
I have a co-founder that is basically squatting on his vested shares (15%). The company is now behind in payment and we have received our first demand letter last week. He wants to BK the company because he has assets, I don't. Also there's a clause in our agreement that allows any co-founder to license the IP for $1 if the company goes under. I have the majority voting rights. Is there a way to create a different class of stock and move his shares to the lesser value stock? On another note, I have a disgruntled ex-consultant that brought in 2 investors and received 1/4 pt in stock for doing so. He is now telling these investors not to invest in the company until HE receives more shares & a title in the company. Is this tort, Interference with Business? How can I stop him? The Investors were ready to come in until he jumped in. His goal is to remove me from my own company. BTW, investors have NO voting rights.
1 ANSWER
Since you have majority control, you should be able to do pretty much whatever you want, as long as it is not punitive to your other shareholders and intended to either hurt them or benefit yourself. I would want to document a strong case that whatever you choose to do is in the best interests of the company and its shareholders.
15% should not stop you, unless he also has other contractual rights. I need to know what other rights you might have given him.
Suing the finder isn't going to get you those new investors. If that finder's fee is too expensive, you'll just have to find other investors.
We advise clients regarding these kinds fo problems and problems with suppliers and customers, all the time. It helps to have us already know all about your business, so that when you have a question, we already know enough about you and your business that we can get right to the current problem and not learn about your business first.
Please call me to set up a time to meet and learn more about your company.
Dana Sack
510-286-2200
Answered on Feb 25th, 2014 at 1:14 PM