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I have a close friend who is a 50% owner in a restaurant which is organized as a corporation. They have been

Naples, FL |

A close friend who is a 50% business parnter in a corporation, with her now her ex-husband. They have been having strained relations which led to her not being in the restaurant for over a year, yet still involed in duties outside of the front of the house. They have been trying to negotiate a business resolution, buyout or new agreement but have been unsuccessful to date. She now informed her partner she would be back in and would be resuming her front of the house activities. He then called a staff meeting and informed their employees they were closing the restaurant indefinately due to his problems with his partner. Can she go in and open the restaurant without him?

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Attorney answers 3

Posted

The answer to the question depends on the wording of the articles of incorporation, the bylaws of the corporation, and any shareholders' agreement or voting trust agreement that may exist. Your friend should consult an experienced business lawyer in her area rather than relying on second hand advice from an online legal forum.

Disclaimer: This answer is provided for informational purposes only, does not constitute legal advice, and does not create an attorney-client relationship. Actual legal advice can only be provided after completing a comprehensive consultation in which all of the relevant facts are discussed and reviewed.

Steven Halbert Wilhelm

Steven Halbert Wilhelm

Posted

Marshall Deason's comments are well put; any advice without looking at those documents would certainly be suspect and subject to challenge if the documents were in opposite. But, assuming that there is no voting trust agreement; no shareholders agreement and that the bylaws and articles are silent on the subject- and given that they are 50-50- you would seem to have the classic board- deadlock under California law, at least. The safest way to proceed would be to petition the Superior Court to appoint an interim outside board member, who was also conversant and knowledgeable in restaurant operations ( so as to measure whether or not the business was actually able to still operate if your friend so chose) and assuming that it was still viable then have the interim board have a meeting and cast the directors vote to continue on with the operations, with the ultimate end goal to get a buyout successfull;y completed ; or continue the operation going forward on a profitable basis. Another option would be to move for a dissolution of the corporation by filing suit for the same and make a motion to the court to approve yourself and your appointed staff to continue operations pending sale or buyout. It is a certainty that unless the operation is losing money - and possibly depending upon h ow much , that you will end up getting more on sale and or buyout if the business is a going concerrn. None of this will be easy; it is all replete with multiple legal problems and hopefully each partner will find a good lawyer and work it out. Good luck, Steve W

Posted

Corporate law is subject to County, State, and Federal statutes, regulations, and legal precedents. Your friend would be wise to consult with an attorney, otherwise he is driving blind.

Albert Batista, Esq 9853 North Tamiami Trail, Suite 203 Naples, Florida 34108 Phone: 239-272-9327 Attorney Albert Batista is located in Naples, Florida, and provides answers to these legal questions for educational and informational purposes only, and not as a substitute for an in-person meeting with an attorney. No attorney-client relationship is created by this generic legal answer. If you would like to consult with an attorney, please feel free to call or email me to set up an appointment, or contact any of the attorneys in your area.

Posted

Restaurants are extra-tricky when compared to other businesses due to the additional permits and licenses involved (e.g., liquor license, food and beverage license, etc.). The corporate bylaws will control the corporate governance, and where there are gaps, look to the statute.

Practically speaking, there is a cost-benefit analysis that must be done/reviewed prior to taking any legal action, and in the case of business dealing (such as here), these must not be overlooked. It's not a simple matter, and I strongly encourage the parties to retain legal counsel.

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