Legal Question in Business Law in Arkansas

My husband and I were the silent partners for a business that failed that my husband's cousin talked us into. He left us high and dry and we were stuck with closing the business and paying off all the loans and expenses. The original plan was for us to put up the front money and he would pay us back. We ended up having to invest more than originally planned in order to maintain our credit until we could close it down. Also there were bills that he owed that we were also responsible for (for ex: lease, utilities, phone, etc.). He disappeared on us and just this week has surfaced. This business originated in 2006. Do we have a legal case to sue him to repay the money he took from us? I had to take a $100,000 second mortgage input home to keep from filing bankruptcy. Is there any way that we can legally get our money back from him or are we the responsible party and he is free and clear? Your advice would be appreciated.


Asked on 6/02/10, 10:10 am

2 Answers from Attorneys
Patrick Tracy Patrick J. Tracy, Esq, P.E.,

This is not a simple question that can be answered on a bulletin board. I am not licensed in Arkansas so I can only speak in general terms. This appears to be a breach of contract as well as some fraud involved. In most states, breach of contract actions can last for up to 6 years. This might be a viable claim. However locating assets to satisfy a judgement can be another thing. The best thing to do would be to contact a business lawyer in your jurisdiction to discuss the case. Most will give a 30 minute interview for free. He will be able to render a possible cause of action. Remember these things most times get very difficult and can be costly.

Good luck!

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Answered on 6/02/10, 1:23 pm
Kevin B. Murphy Franchise Foundations, APC

As the other attorney says, much more needs to be reviewed and analyzed. You violated a cardinal rule of business - don't go into business with a relative. These things happen all the time - they use the personal relationship to their advantage. Whether you have the time and money to pursue him legally is an entirely different question. Consult with an attorney in your area for specific advice.

Kevin B. Murphy, B.S., M.B.A., J.D. - Mr. Franchise

Franchise Attorney

Kevin B. Murphy, B.S., M.B.A., J.D. - Mr. Franchise

Franchise Attorney

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Answered on 6/02/10, 1:35 pm


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