Business Investment Obligation when does it end
husband ownes a business, a family member has invested in his company $56000.00 in 2002 drew the investment on credit cards.this investor has a contract that states that his investment would yeild him a return of 5% of net profit pertaining to this company when sales are made. this company doesn't exist anymore. my husband has personally paid this cousin over $110000.00 and because this investment was on his credit cards he is trying to obligate my husband further for all the intrest owed on these cards. other than the fact that my husband feels bad that his investment didn't work out for either of them is he obligated any further compisation or consideration?Thank you for your quick responce.
1 Answer from Attorneys
Re: Business Investment Obligation when does it end
If I understand your question correctly, a relative invested $56,000 in your husband's business using his crdit cards to come up with the$56,000. There is a contract giving the relative 5% of net profits of the company.
Given these facts, a proper accounting if the company should provide the gross sales, and after backing out for expenses should provide the net sales. Unless there are other facts which you have omitted, under the contract the relative is entitled to only 5% of the net sales. No matter how large or small that number is.
Unless there is specific language in the contract about paying the relative's credt card interest, or loan interest, I don't think he is entitled to credit card interest payments.
This is a general answer. To fully determine your rights and obligations I would have to see the contract and accounting for the business. You may give me a call to discuss your situation in greater detail.