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I'm in a family business, (corp.) 5 members,we are all employees of the company I was fired then sued for 50k.If I wanted them

Dracut, MA |

to drop the lawsuit I had to sell my shares of the company to to my siblings for fair market value. Is this legal.

Attorney Answers 4


It sounds possibly like extortion. No one likes to get into legal battles with family but you should contact a local attorney for advice as soon as possible.

Be Well,


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Have you answered the complaint filed against you? Was there "cause" to fire you? Was cause needed to fire you? What are you accused of doing that would require payment of $50k? Lots of unknowns in terms of the case itself.

Please hire an attorney in MA and get your answer to the complain on file. You may also be able to counterclaim against plaintiff(s) for, at a minimum, breach of contract, fraud and attempted conversion. Good luck; family business can be tough.

This response is for general purposes only, is not legal advice and does not constitute an attorney client relationship with the questioner.

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The question here isn't what is legal, it is what are you going to do about a situation in which you have multiple problems. You need a good commercial litigation attorney to examine the lawsuit as soon as possible and determine the basis for a $50K claim; you need an employment attorney to review the basis for your termination, and a corporate attorney to determine whether you have shareholder rights that are being violated.

We are a Houston Firm focusing on helping businesses with all their legal needs. We assist firms from start up to exit strategy and all the complications in between. This response is based on Texas law, but does not create an attorney-client relationship. This site provides general information. Please contact a lawyer in your jurisdiction for a solution to your issue.

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You ask is this legal? The answer is yes - a company in Massachusetts can terminate an employee/shareholder for cause and yes it can sue that terminated employee/shareholder for whatever cause of action they allege and yes as unseemly as it may appear they can then propose to settle your claims against them and their claims against you if you agree to sell your stock back to the Company or to your fellow shareholders. Not knowing the facts behind the company's actions I cannot however advise as to whether such actions were prudent and whether they will hold up in court.

My suggestion would be to immediately hire an attorney, have him answer the complaint, file a counterclaim and if appropriate file a counterclaim under MGL c. 93A (triple damages and attorneys' fees) for bad faith and unfair dealing. If you were not paid your last check when you were terminated you also can file a Complaint with the Massachusetts Attorney General's office for unpaid wages. It also carries the threat of criminal prosecution for the officers of the Company if they fail to pay up. These actions will get you back to an equilibrium where you then can assess what the appropriate steps are to resolve this matter without being pressured to settle.

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