View Full Version : Need Advice on Problems in a Business
Guys,
Not sure if anyone has some good sound legal advice.
My brother and me are at loggerheads; I have shares in a small jeans and fashion store in Perth that is making money but is being picked apart by his wife and its affecting our ability to apply for more bank facilities and we need more capital pumped in to be able to buy stocks for the coming festive season.
1) Our share's in the company are worth AUD$150,000.00 each.
2) Our annual profit from the company is AUD$85,000.00 per year
3) His wife, because they can't get along and are not on talking terms, come's into the store, and demands cash from the till and claims for items, travel and so forth that is not allowed by him as managing director. She passes the reciepts, the cashier gives her the money or she makes a huge amount of noise scaring away customers
4) She has taken, over the last 4 years, AUD$600,000.00 in cash from these claims without his approval.
5) She is entitled (as are we both) to AUD$2000.00 in director's fees, AUD$1000 credit card allowances and AUD$1000 in allowances for a car per month. Thats only about AUD$50K per year and over 4 years, thats AUD$200K each.
She has clearly taken more than she is entitled to and whenever he asks her officially and unofficially to stop, she tears the memo's to her in front of him or tells him to piss off.
She is clearly out to destroy the company and couldn't give a damn when I talk to her or try to convince her to stop it.
The banks want to know why we are paying out so much to her and affecting the books. Have asked him to make a police report or get legal advice on how to stop her but he keeps telling me he can't do anything as she is still a shareholder.
I don't know what the hell to do because its killing the business and its affecting the moral of the staff.
Is there any advice anyone can give from a legal stand point whereby we/i can apply to have her removed as a shareholder for abusing company rules or regulations because the amount of cash she has taken is substantially more than what her/our shares are worth?
I am really at an end as far as what to do as I depend on the director fee's to help pay our home loan and part of me and my wife's car loan and the business will probably need to be sold if we don't get this stopped (her taking cash).
To be Family sucks sometimes.
Time to move from family to business. Time to go see a local lawyer that does business law.
Get it stopped one way or the other. He is on your side or her side, have him make the choice.
But see a lawyer.
I had a similar experience.
It sounds like your wife, like mine thinks she is entitled. She has no idea, nor does she care about how a business is run or how you and your brother are accountable. She is also disrepecting you and putting you in the middle, same as mine did.
My wife would take money out of my business account and wouldn't record it. I couldn't tell you what she took or if it was more than reasonable or not, I can't tell if I was profitable during that period either. And it doesn't really matter, it should have never happened and she knows it.
My Solution, I opened a new account and she doesn't have access to it.
If she is named as part of the company I would get her removed.
If she ia a signator on the bank accounts get her removed.
An honestly family or not, if she is robbing the cash box I would get a restraining order to keep her out of the store and if she keeps it up I would file charges.
Business is business and family comes second.
Also ask yourself what would you do if it were your brother and not your wife.
And like Pete said, go talk to the business lawyer.
Guys,
Not sure if anyone has some good sound legal advice.
My brother and me are at loggerheads; I have shares in a small jeans and fashion store in Perth that is making money but is being picked apart by his wife and its affecting our ability to apply for more bank facilities and we need more capital pumped in to be able to buy stocks for the coming festive season.
1) Our share's in the company are worth AUD$150,000.00 each.
2) Our annual profit from the company is AUD$85,000.00 per year
3) His wife, because they can't get along and are not on talking terms, come's into the store, and demands cash from the till and claims for items, travel and so forth that is not allowed by him as managing director. She passes the reciepts, the cashier gives her the money or she makes a huge amount of noise scaring away customers
4) She has taken, over the last 4 years, AUD$600,000.00 in cash from these claims without his approval.
5) She is entitled (as are we both) to AUD$2000.00 in director's fees, AUD$1000 credit card allowances and AUD$1000 in allowances for a car per month. Thats only about AUD$50K per year and over 4 years, thats AUD$200K each.
She has clearly taken more than she is entitled to and whenever he asks her officially and unofficially to stop, she tears the memo's to her in front of him or tells him to piss off.
She is clearly out to destroy the company and couldn't give a damn when I talk to her or try to convince her to stop it.
The banks want to know why we are paying out so much to her and affecting the books. Have asked him to make a police report or get legal advice on how to stop her but he keeps telling me he can't do anything as she is still a shareholder.
I don't know what the hell to do because its killing the business and its affecting the moral of the staff.
Is there any advice anyone can give from a legal stand point whereby we/i can apply to have her removed as a shareholder for abusing company rules or regulations because the amount of cash she has taken is substantially more than what her/our shares are worth?
I am really at an end as far as what to do as I depend on the director fee's to help pay our home loan and part of me and my wife's car loan and the business will probably need to be sold if we don't get this stopped (her taking cash).
Hold an emergency stockholder's meeting and vote her off of the board of directors.
Instruct the cashier not to give her any more money from the cash drawer, (if he/she does then fire them) board members and or stockholders legally can't demand/take cash from the till.
Run, don't walk, to a competent business law firm.
Your brother sounds very pussy whipped.
Accidents happen in the home and workplace all the time; who knew that the pressure of flushing the toilet (luv, WC, latrine) could generate enough pressure to suck her small intestins out her rectum??????? Just a passing thought.
Bear(043)
AngelsSix
10-24-2008, 16:12
As a woman..........I AGREE!! Do not let this continue. Get a court order if need be. Also, quietly opening a new business account at a different bank which she will not have access to is important. The banks needs to be aware of the problem. Any business associates also need to be advised that she is no longer to deal with anything to do with the business. I am probably repeating a lot of what the others have already said, but I believe that women should not be allowed to just take advantage.
Red Flag 1
10-24-2008, 16:15
hoot72,
Is this business in the USA, or Brunei?
RF 1
I had a similar experience.
It sounds like your wife, like mine thinks she is entitled.
...
Also ask yourself what would you do if it were your brother and not your wife.
And like Pete said, go talk to the business lawyer.
It's his sister in law, not his wife.
The woman is robbing you blind hoot, definitely get a lawyer and stop it. I hope it doesn't ruin your relationship with your brother, but damn I know I wouldn't go broke or allow a business to fail because of my brother's spouse.
It's his sister in law, not his wife.
The woman is robbing you blind Paslode, definitely get a lawyer and stop it. I hope it doesn't ruin your relationship with your brother, but damn I know I wouldn't go broke or allow a business to fail because of my brother's spouse.
A separate bank acount solved my problems as far as the business goes, it none the less continues to be an adventure in other areas.....but my number one goal is my kids continue to have smiling faces.
A separate bank acount solved my problems as far as the business goes, it none the less continues to be an adventure in other areas.....but my number one goal is my kids continue to have smiling faces.
I'm sorry, I meant for that last part of my response to refer to hoot...not you. My post is corrected.
That said, glad your business problems are solved...good luck with the rest. :)
Accidents happen in the home and workplace all the time; who knew that the pressure of flushing the toilet (luv, WC, latrine) could generate enough pressure to suck her small intestins out her rectum??????? Just a passing thought.
Bear(043)
Is that what Teddy Kennedy did to you?
hoot72,
Is this business in the USA, or Brunei?
RF 1
Its in Perth actually but I am living out here in Borneo (across the border from Brunei Darusalam.)
It's his sister in law, not his wife.
The woman is robbing you blind hoot, definitely get a lawyer and stop it. I hope it doesn't ruin your relationship with your brother, but damn I know I wouldn't go broke or allow a business to fail because of my brother's spouse.
Agreed. Which is why I have engaged a half decent lawyer and am getting the auditor's to go back and account for every single claim and cash demand she has made for the last 3-4 years.
My brother doesn't seem to have a clue what to do anymore or how to get out of this mess; its obvious he now finally realizes what he should have done sooner. His lack of control from the start allowed this to get worse and worse without my knowledge and now, I am trying to save what I can.
I just wonder if someone has shares in the company worth x but takes cash and advances without the permission of the managing director thats more than what the shares are; does it mean they have to return the cash or can you negate or cancel the value of their shares?
Hold an emergency stockholder's meeting and vote her off of the board of directors.
Instruct the cashier not to give her any more money from the cash drawer, (if he/she does then fire them) board members and or stockholders legally can't demand/take cash from the till.
Run, don't walk, to a competent business law firm.
Your brother sounds very pussy whipped.
Understatement of the year. I can't believe he has folded and given in to the wife. Its sad to watch them both arguing the way they do; its embarrassing to say the least because the things she says to him point blank in front of the staff.
No person (male or female) should be treated that way or had that sort of stuff said to them, after 20 years of marriage.
Its sad but, he has only himself to blame. And no one else.
I am just doing what I can to salvage what I can from the business and hope to put a stop to this.
82ndtrooper
10-24-2008, 22:26
Deleted by Richard - the poster's title says it all.
Unintended consequences of business partnerships.
Also look into a Cross purchase insurance plan. Essentially buying life insurance on each of the partners. The premiums are usually tax deductible and you can plan these out with attorney's and financial planners that specialize in estate planning and business succession planning.
You can agree what it will take to buy out the idiot family members so that when or the other of you becomes deceased idiot sons, wivess and daughters can be paid out a lump sum and told to walk down the road in the traffic.
It's protecting your business, and can be done if you or your partner becomes disabled also.
Talk to qualified estate planning professionals.
Perhaps a private placement of stock can raise capital and keep the idiots out of the cash box.
Thanks for that 82 trooper. That was an angle I hadn't been told about or advised about. Its very much appreciated.
Sigh...
As Gypsy pointed out...I thought is was your wife.
If it was my Brothers wife it would be more complicated unless he is 100% with you/me on the matter.
If I called my Brother in Law the lawyer and told him a senario such as yours, I am guessing he would ask me:
What is the basis of your concern?
What is the business worth? What is your basis of the worth? What assets are involved?
Did you have a business plan? Was it in writting? Was it signed? Who drafted it?
Did you have a profit distribution plan? Was it in writting? Was it signed? Who drafted it?
Is she an officer or shareholder?
Who is authorized to draft checks? Is she a signator on the back accounts?
Is she entitled to proceeeds from the business? If so how much?
Is your brother aware of the situation?
Does the business have any debt?
Are you behind on payments?
Can you buy the others out? Is it worth buying out?
And he would warn me of all the family and financial reprecussions that could be involved.....including his fees. And inform it would be advisable to get this settled out of the courts if possible.
You might get some leverage from your financial lenders and vendors if your seen as the most responsible in managing the business. Vendors want to sell product and Lenders want to continue getting payments on time. It is their best interest that the business succeed. I know it happens, but have no idea how you accomplish that.....maybe with the assistance of an Accountant and Lawyer.
As Gypsy pointed out...I thought is was your wife.
If it was my Brothers wife it would be more complicated unless he is 100% with you/me on the matter.
If I called my Brother in Law the lawyer and told him a senario such as yours, I am guessing he would ask me:
What is the basis of your concern?
What is the business worth? What is your basis of the worth? What assets are involved?
Did you have a business plan? Was it in writting? Was it signed? Who drafted it?
Did you have a profit distribution plan? Was it in writting? Was it signed? Who drafted it?
Is she an officer or shareholder?
Who is authorized to draft checks? Is she a signator on the back accounts?
Is she entitled to proceeeds from the business? If so how much?
Is your brother aware of the situation?
Does the business have any debt?
Are you behind on payments?
Can you buy the others out? Is it worth buying out?
And he would warn me of all the family and financial reprecussions that could be involved.....including his fees. And inform it would be advisable to get this settled out of the courts if possible.
You might get some leverage from your financial lenders and vendors if your seen as the most responsible in managing the business. Vendors want to sell product and Lenders want to continue getting payments on time. It is their best interest that the business succeed. I know it happens, but have no idea how you accomplish that.....maybe with the assistance of an Accountant and Lawyer.
Thanks for the advice paslode. I am sorry I took so long to reply back but..
We got the audited accounts sorted out for 2008-2009 to show a profit and to show the company performed a hell of a lot better than previous years and injected more capital into the company and increased the value of shares by transfering some properties into the company's asset list .
Also filed a complaint against the bank with the federal government that they (the bank) were not giving us a chance despite us submitting a business turn around plan and also shown a change in direction for the better with fresh capital pumped in and the company not showing negative share capital.
That worked. The feds did apply pressure on the banks to give us the financial help we needed and it took 2 months but, it was solved.
Thanks so much for the help and advice guys...much appreciated.
It was however, many sleepless nights and worrying...
It was however, many sleepless nights and worrying...
Always be prepared for more :D
Happy to hear it work in your favor and best of luck to you!
Remington Raidr
02-11-2010, 07:29
Also filed a complaint against the bank with the federal government that they (the bank) were not giving us a chance despite us submitting a business turn around plan and also shown a change in direction for the better with fresh capital pumped in and the company not showing negative share capital.
That worked. The feds did apply pressure on the banks to give us the financial help we needed and it took 2 months but, it was solved.
So you got the gubmint to compel the banks to give you a loan. Good for you. More than a few people did that stateside, and, well, there were some . . . problems. Enquiring minds want to know, strictly business-wise, how did you muzzle, de-fang, or otherwise tame the wicked witch of down under? I'm not seeing it here, and SHE seemed like a BIG part of the problem. Specifically did you have your OWN (not your company's or your brother's) attorney? How did you resolve the chunk of change she has already taken? Just askin'.:confused:
Always be prepared for more :D
Happy to hear it work in your favor and best of luck to you!
Cheers mate..appreciate it..but yes, I am sure there will be more obstacles ahead for sure....there always are.
Don't you sometimes miss student life? Life was so much less "complicated."
;)
So you got the gubmint to compel the banks to give you a loan. Good for you. More than a few people did that stateside, and, well, there were some . . . problems. Enquiring minds want to know, strictly business-wise, how did you muzzle, de-fang, or otherwise tame the wicked witch of down under? I'm not seeing it here, and SHE seemed like a BIG part of the problem. Specifically did you have your OWN (not your company's or your brother's) attorney? How did you resolve the chunk of change she has already taken? Just askin'.:confused:
To be honest, I learned a hell of a lot from A-Z on how banks look upon loan applications and trade facilities in the space of 6 months and that helped; getting sound advice from a banker who is a friend and can explain to you why applications keep getting rejected does help because banks just usually can't be bothered to explain why.
1) We had a negative share capital and were technically insolvent (bankrupt).
2) We had existing loans to the business which were relatively short term (15 years) with re-payments taking a toll on the business each month due to the heavy commitments.
3) High running costs which was reflected in the P+L Statement and Balance sheets as well as inventory being low due to a lack of trade facilities (which we were trying to get in the first place to allow us to purchase inventory and to allow us to repay the bills for these inventories 120 days later).
4) It was obvious to the banks the company was being run into the ground with poor management decisions and 3 years of back to back losses that took the company into losses exceeding 800k AUD.
It actually took 2 years of audited accounts that showed a profit and the company injecting more cash back into the company to take us out of insolvency and moving some properties into the company as well as a detailed explanation WHY we got into trouble in the first place and what changes we had made as well as what our future plans were as far as a point by point turn around plan including increasing our inventory but improving turnover of inventory in a reasonable period of time that helped.
We were LUCKY. Very very lucky. Our audited accounts for 2007-2008 took forever to get done so we never got to show the actual accounts to the bank but a draft copy. By the time I realized why our applications were getting rejected with a little bit of help from the feds who hinted that "if i got the company out of negative share capital, it would make a HUGE difference between getting what we asked for as far as trade bills were concerned" it put me on the right track.
I had sacked our previous auditors, hired a new one who was highly recommended by the feds, got the 2007-2008 and 2008-2009 audited accounts sorted out by showing consistent improvements in the turnover of sales, lower running costs and increased inventory (we ordered more inventory which helped increase sales but negotiated for longer repayment plans for a short period of time) and then pumped in cash from golf memberships which were sold and disposal of my and my bro's personal cars with the cash being used as working capital for the company and taking pay cuts as directors.
We also requested for the loans to be extended into longer term loans with lower repayments per month and that was also approved.
It does help to understand why as I said banks say NO because as I said, most of the time, they don't bother telling why so if you can get an answer from them as to what specifically was the reason you didn't get the loans or facilities you asked for, you at least can sort the problems out and then go back to them with a better chance of getting perhaps what you need...or getting some of what you need..