This week we’ve been helping an old client with a business venture that has been running for nine years.
They run a hospitality business.
The soon-to-be ex-wife of one of the directors is a rather aggressive lawyer who is making all sorts of allegations about my client and other directors, other than her father, who is also a director, but who in her eyes can do no wrong. She now wants to put the company into administration, which will see the shareholders lose over $200k between them, and their reputation.
Despite being given regular financial reports, which are some of the best financials that I have ever seen for any company, she is complaining about not being given enough financial information, among other things, but we think they are simply incapable of understanding them.
Anyway, the strategy is to call a directors meeting, being held this afternoon, to discuss the solvency of the company, which does have a temporary cash flow issue, but three shareholders are willing to lend money to the company, secured against the company assets, which puts the solvency issue beyond doubt. Those three would like contributions from the others, but they are unlikely to chip in.
The long term strategy is trade out of difficulties, which they are on track to do, and to sell the business, which is the only real way to part company with these people.
For assistance with disputes between business associates, contact Michael Paterson & Associates.