Shareholder Deception

[sepia]

I am a joint shareholder of a company, so 50/50.

We have a company wanting to buy us out for £200k, so £100k each.

I cannot go with this offer as it is a 4 year earn out deal, of which I have no interest.

My business partner, advises me that due to the fact that I was key to the deal, that valuation has gone down to £120k, and he is now offering me £60k to buy me out, based on that figure.

We are in the throws of negotiating right now, as he needs to get me out a.s.a.p. and he needs to sell the company due to it being tied in to the sale of his bigger company at the same time.. i.e. he's a director of both and is selling both at the same time to the same other company..

I don't for one minute feel he is being honest with me, I think the valuation is still exactly where it was i.e. £200k. The easy answer is to challenge him to produce documentation to back up the figure of £120k.i.e call his bluff.

Where do I stand legally if I find out later on that he was lying and he has been trying to deceive me..?

Thanks in advance..

[echat11]

Hi SEPIA

The best thing to do might be to contact a solicitor (fixed fee) to handle the sale on your behalf (you don't need to run up a huge bill, in essence this should be a simple transaction). As soon as your partner knows that a solicitor is handling the transaction on your behalf, you should know exactly where you stand with the transaction and honesty of your partner.

If after the transaction has taken place, you find that you have been defrauded, then obviously you can take 'legal action provided you have 'proof'. The key is making sure everything is done in writing.

[islandgirl]

If he needs to sell then ask for £100k up front or no sale. It will be worth that to him presumably to ensure the other sale goes though. Why bother asking him to prove the lower valuation?

[sepia]

If he needs to sell then ask for £100k up front or no sale. It will be worth that to him presumably to ensure the other sale goes though. Why bother asking him to prove the lower valuation?

Thanks for your advice, its very much appreciated...

This is also tied to a 12 month employment contract, so I can do a hand over and appear to our customers that I'm not gone.., but there is a big bit of me thinking just to hand in my notice in and keep the shares, as that would then potentially put me in a very strong position, as the only way the "bigger" deal would happen is to start talking..., and he would have no hold whatsoever on me as part of his plan is to tie me up with a NDA.

The other angle is to go around all this lot and speak directly with the company who want to buy us out, and negotiate with them privately..