Hello, I formed an LLC for a new restaurant that I wanted to open with a partner. We both had 49% stake and we took on another member who has 2% and acts as the arbitrator in the case of disagreements. The other majority member who also manages the restaurant has been taking cash from the business daily and has also run credit card transactions as cash so there are discrepancies on how much cash that has been taken. Now he has filed an embezzlement case against me with the police department and is claiming that I have stolen over $19,000.00. The business partner has also registered the business in the county as a sole-proprietorship under his social security number and for the last month he has been funneling all monies from operations into a new bank account created for this new business entity that he wholly owns. He has breached several rules outlined in the LLC Operating Agreement and has also breached fiduciary duty. My question is, What should I do? This situation is quite a mess and he has emptied the LLC Bank account to which he was a signatory as well because he was a member in the LLC. The City will not shut down utilities for the business and now my money is gone. I have filed a statement with the police department, but nothing is really happening. The LLC in which I am the president which owns the business is also the tenant of the space on the commercial lease agreement which was submitted to the city. We also have the sales tax permit, department of health license and all other permits registered under the LLC. His new business entity does not have these things.
Answer
You will need to retain a very good litigation attorney who is also a criminal defense lawyer to assist you in this matter.
There is a lot to be done and it will not be easy or inexpensive. You have a lot of complicated and serious issues to work through, defend and resolve.
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