Ask a Lawyer - Today's Q & A

I am 50% owner of a s corp. My business partner has locked me out, opened new bank accounts, sent notice to all customers that I am no longer part of the company, canceled my health insurance.

I have very little savings to get wrapped up in a long legal battle. Yet I can not let this go. Justice needs to be served. This battle started with my confronting him about spending large amounts of company funds to pay his personal bills and personal taxes.

What can I do? Will a attorney take this on a contingency?

A first thing to do is to look at all of the corporation's governing documents (e.g., articles of incorporation, bylaws, shareholder agreements, buy-sell agreements). To the extent that such documents exist, they may help to define what your rights and remedies would be here. Second, review the statutes in the state of incorporation to determine which provisions may govern a situation such as this one. In particular, you should review provisions relating to a shareholder's right to force a dissolution of the corporation, which may be your best leverage point. Right or wrong, you should also continue to have rights as a shareholder to review and inspect records of the company, and to get certain tax information, including a K-1 (since you say it is an S corporation).

Short of this, it sounds like you are in a tough situation that may not get resolved short of suing your partner. The likelihood of an attorney taking a case of this nature on a contingency is doubtful (a contingency based on what?). Still, you should go see a lawyer right away. Take all your paperwork and correspondence with you. There may be other remedies that aren't readily apparent from your post.

Was just contacted by Capital One. They say they just purchased a financial institute and found that I owe $800 from a credit card purchase in February 1994. I recalled I did have a card way back then and owed about $150 maybe and paid it off. This has been many years for me to remember all details. What must I do? I do not want to pay something I do not owe, I cannot afford this.

Instead of your proving it, tell them to prove it! Ask them for evidence of the debt if you really don't know that you owe it. If you owed $150, it's possible that it could have grown to $800 with interest. Therefore, you might try to just settle for $150 and be done with it.

It is very common for companies to buy portfolios of credit card debt with no record of the obligation. They just take their chances that consumers will believe that they owe the money and will pay it to avoid trouble. Therefore, unless you're sure you owe it, ask them to prove it to you.

If Capital One wishes to obtain a judgment, it will have to prove it to the court unless you simply fail to respond. If they do serve you with a suit, be sure to respond! If you don't, they won't HAVE to prove it as they will have a default judgment. It's possible that if they sue you and you respond and show up to challenge the debt, Capital One won't have the documentation to prove it. That is a chance you'll take which is why I recommend that you try to settle up and be done with this if you did default.