Legal Question in Business Law in Arizona

angel investor gone bad

we started a small business 3 months ago and needed working captial, we offered an investor a small percentage of the business AND repayment of loan. She offered the first investment and then at a later date, additional monies without assigning it to a contract, or being asked for it. (first investment was contracted) she is now demanding full repayment of all monies plus double the percentage. How obligated am i to pay all the investment back, plus what percentage. And I am allowed to include the total monies invested into a new contract that shows ONLY the repayment of the loan with interest


Asked on 11/14/05, 2:22 am

1 Answer from Attorneys
Donald Scher Donald T. Scher & Associates, P.C.

Re: angel investor gone bad

You have not provided enough information to give a complete answer. You do have an obligation to pay back all monies loaned to the company. When it must be paid back and at what interest rate is a question which a court may decide. It would seem reasonable to believe that the second loan funds were made on the same terms and conditions as the first money, even though it was not specifically so stated. You have not said anything that the second money was a gift or intended to pay for capital stock.

You should employ counsel or some person to mediate a solution informally, so that you can get this person out of your company and pay back the money at a fair interest rate.

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Answered on 11/14/05, 10:39 am


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