I am "locked out" of a company that I own 33% of. What rights does the 4th entrant have?

Asked over 1 year ago - New York, NY

Me and 2 others began an online venture and created a media gaming company online. We verbally agreed from Day 1 that we would split 3 ways, 33%. Later on, a 4th entrant came onto the team to "replace" me as I was not personally getting along with the other 2 owners. There was absolutely NO paperwork filed. Now they are fully partnered with another organization, they have monetized all productions made under the name that I have personally created. I have lost access to the company website. I still have access to the email, fully partnered youtube account, twitter and facebook. What is the time frame and what percentage can I legally acquire as they are generating income on a daily basis. I am seeking legal advice before I am FULLY locked-out from ALL accounts.

Attorney answers (4)

  1. Roman Leonov

    Contributor Level 8

    4

    Lawyers agree

    Answered . First of all, you certainly need a lawyer.
    Second, depending on how long you were in business, I seriously doubt you have "absolutely no paperwork", especially considering that you are an online business. Things such as e-mails, IP addresses, bank checks, phone records, etc. come in handy.
    Third, depending on the business structure (LLC/Corp), you have different options and avenues of pursuit. Assuming you have no corporate agreements, you will then be subject to applicable statutes depending on the business structure, and case-law.
    As for the time frame, the sooner the better. Statutes of limitations vary depending on what causes of action you have.
    As to the 4th entrant, if you have no paperwork, and the other 2/3s agree to let the 4th entrant in, you may have no recourse against the 4th entrant personally.
    Fourth, a common way of handling issues like this is through "imputed" corporate ownership.
    Fifth, this will not be cheap for you in terms of legal fees, and nearly impossible to do on your own.
    Good luck.

  2. Eric Edward Rothstein

    Contributor Level 20

    1

    Lawyer agrees

    Answered . You can go into court to seek an accounting and other relief . However, without paperwork it will be your word against the others. Do you have any type of proof where the percetage of ownership is mentioned such as a bank account application or something else? You are going to need to hire a lawyer.

    I am a former federal and State prosecutor and now handle criminal defense and personal injury/civil rights cases.... more
  3. Frank Anthony Natoli

    Pro

    Contributor Level 19

    Answered . Hi,

    Just as you verbally agreed to participate in this venture you can verbally agree to transfer your interest in whatever this structure of entity is to another as well.

    It is not clear from your writing whether you expected and intended to be removed as you stated you were not getting along with the others and the new partner was expected to replace you.

    Depending on the structure here you may some options. A lot will depend on your capital contributions, level of work provided, etc. If there is no proper entity created it defaults to a general partnership under NY state law.

    As the others noted, I suggest you contact an attorney to discuss your options. We have dealt with these situations before, so feel free to contact me of course.

    Best regards,
    Frank
    Natoi-Lapin, LLC
    (see Disclaimer)

    The law firm of Natoli-Lapin, LLC (Home of Lantern Legal Services) offers our flat-rate legal services in the... more
  4. Alan T Harrison

    Contributor Level 11

    1

    Lawyer agrees

    Answered . The phrase "we verbally agreed" begins the story of many business disputes. It is a particularly problematic statement with regard to certain intellectual property, such as patents, copyrights, or trademarks, where ownership transfers statutorily require written documents. (See 35 USC 261, patents; 17 USC 204, copyrights; 15 USC 1060, trademarks.)

    ATTORNEY ADVERTISING. You are not my client. I am not your attorney. The above comments are not confidential,... more

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