I’m Selling My Shares of the Business to My Sleazy Business Partner

Brought to you by the EveryDollar app. Start budgeting for free today. I have a little bit of a situation happening right now where I have started a company with a co-founder three and a half years ago. We, and from day one, we've had some disagreements, but throughout those disagreements, we've always been able to come to a compromise and we were both very hardworking. Over the period of time, the company has grown to, uh, 12 employees, um, with a shop in New York and everything that you could possibly need to do a beautiful paint job on your home. I have worked tirelessly for the past three and a half years to build the business to what it is today and what it's cash flowing at today. Now, these disagreements between my co-founder and I have come to a point, um, where a lot of trust is lost. You started other businesses within the same shop, um, taking resources from my business. While simultaneously, um, I mean, anything from, you know, putting wrong things at the paint store on other accounts, X, Y, and Z sketchy checks. So fraud hashed in his other bank account. So fraud of like six of six, like we're talking $6,000. So he's stealing from what he's stealing from you. Um, yes, that's what that's called. It's called theft and fraud. I, and, um, you know, I'm going to be hiring a very good lawyer, um, during this process, along with a forensic accountant and I've had a ton of advice from, uh, people that have run businesses and, um, done this type of thing. Now, moving forward here, um, it came to a point three weeks ago, two weeks ago where, um, he had handed me an operating agreement because I had never fully signed into an operating agreement with him and 50, 50 cents one, uh, day one. And I was going to get an operating agreement, draft it up and make sure that it's legit. But she never did without which I never did. Now he had gone to an attorney without including me in the conversation and he had drafted out a good 20 page operating agreement stating every last thing in the company, he was pressuring me to sign it one day while I was at the office. He's like, you have to sign this. You have to get it done quick. And I go, no, no, I am reading this. I am reading this thing front to back. And what'd you find? Oh, so, um, he basically, uh, 10 pages deep within the document. He hid a clause in there where it basically assigned him as the executive manager and put me as just a member of the company. So how can we help? We see that he's, we see that he's duplicitous. We see like he's a nefarious fellow, but you didn't sign it. Great. So what can we do for you today? No, today, um, I am selling my shares. I'm getting everything together and making sure that it's right. I did get him to agree to pay out fair market value on my portion of the company. Are you selling it to him? And determined. I am selling it to him. Oh, wow. Okay. Interesting. Based, based on a fair market value of what my company is worth. I, so I don't know yet. I have, I have, um, hold on, hold on. Stop, stop, stop, stop, stop. You got to do this in the right order. If you're hiring an attorney and a forensic accountant, wait till they wait till all that smoke clears before you accept an offer, because you don't know how much money has been coming, going out the back door and you don't know what money is your business money. That's used to buy other equipment for his business. You don't know how much he's taken out loans in the business's name to buy. Like you have no idea how bad this is. And, um, my accountant is working on this as we speak, gathering together all of the information, listen, you've done the right things. Tell us what we can do for you today. So once I get this money, um, which should be anywhere from, I want to say $300,000 to $600,000. What is going to be the, uh, it is a gap because he's going low. I'm going a little. But again, to John's point, you don't even know what you're basing it off of. And that's the hard part. So we could, we can spit ball with you and say, well, if it's $300, maybe do this, and if it's 600, maybe do that. But we are literally. Speculate, you'll have to do a net present value on the company. You'll have to depreciate all the stuff you have inside. You'll have to take the, the, the building that you've bought. I mean, you have to, it's just going to be a nightmare untangling this. And by the way, the attorneys in the accountants, God bless them, have a vested interest in going through every receipt because they get paid every six minutes, right? And so if you and him can shake hands on something or get, uh, um, it's kind of like a real estate person for businesses to come in and do a net present value assessment and give you a, if you want to do that, but man, you're getting, he's going to offer you something ridiculous. You're going to make up something ridiculous, but y'all going to have no numbers to actually base this off of. But somebody needs to come in and do an evaluation of your company. And y'all need to agree, probably in some sort of, um, settlement, some sort of like agreement. We're both agreeing that this is the person. Yeah. And that person will do an assessment. We are hiring an assessor on Sunday. We're, um, all going to meet together and determine, um, the assessor to, um, assess the business's value. Great. So let's, let's, let's pivot off of that because I think you're doing all the right things. Let's pivot to your question, which is what would you do with the money after selling your business? Right? That's the real question here. What am I going to do with my life? Oh, your life. Okay. Let's get to that. My life, you tell me what do you want to do? Do you want to open another painting business? You know how to run it. Absolutely. Absolutely not. It is no, no, it is a nightmare. No, it's awesome. You just had a bad part for me, but okay. So you don't want to do that. What do you want to do? I want to ski and I want to paint luxury houses by myself in a mountain town somewhere, and I want to invest my money smart, uh, in a smart manner. That's a very Hallmark movie. I want a million dollars and I want a new Gibson Firebird and actually an old new Gibson Firebird, and I want to like go to space, but wait, no, no, no. Wait, wait, wait. I, I, I'm not going to be as facetious as John because I actually don't think what you're saying is dream. No, I think that, yeah, you ha you were doing something on a very grand scale and you're like, Hey, I just need to back it down a little bit. I don't need a business with 12 employees. I just need me. I'll go out and paint. I can make enough, live enough of a living for me to sustain my lifestyle. And if I can do that in an area that I love someplace where there's mountains, I can ski in the winter. That would be great. Right. Is that what I'm hearing? That is what you're hearing. And, um, before that as well, I, I'm so burnt out. I am so drained from this entire thing and the litigation that's about to happen. I'm going to take my ATV, put it in the back of my truck and travel the entire United States, coast to coast visiting all of my friends and locations that I've wanted. Now we're getting into John's world. Is that a smart idea? No, that's your version of like, I'm taking my ball and I'm going home. Like why? Well, do you have a bunch of money? Tell us what kind of money you have, because that could inform whatever you think you're going to go home with. Here's what's going to happen. You've already done the math on 600,000 and if you get an offer for 450, you haven't taken out taxes. You haven't taken out attorney's fees. You haven't taken out assessor fees. You haven't taken out tax fees. You haven't taken out any of that stuff. And if you get an offer for 450, which might be a super fair offer, you're going to feel like this partner just took a, took 150,000 from you because you just made up a number. And so do don't go visit your friends. Take two weeks off. That's all fine and good. But bro, you can't cash out a life. And by the way, it's your right to be tired on the front end of this. It's fine. Just get through it and make good choices on the way through. Beware spending money before you get it. Beware. Create your free every dollar budget today. The simplest way to budget for your life.