Legal Question in Business Law in California

You are going to need to get a copy of the Corporation's Bylaws as well as minutes of all directors meetings.

Do you have an idea of the money that your "ex" has been paying himself?

Also, do you have an attorney in your divorce? It doesn't sound like it.

Is your "ex" paying himself as an employee of the corporation? If so, is the money that he is receiving a reasonable amount for an employee doing that type of work?

It sounds like you need an attorney for the dissolution/property settlement as well as issues relating to the corporate structure.

I'm down the road from you in Ventura County.

Let me know if you want to discuss your issues.

Caleb

J. Caleb Donner

DONNER & DONNER

LEGAL WARRIORS�

910 Hampshire Road, Suite R

Westlake Village, CA 91361

Tel: 805-494-6557

Fax: 805-494-0990

Email: [email protected]

Website: www.LEGALWARRIORS.com

Yes, you really need to sit down with a lawyer and show him or her all the documents you have, most importantly the corporate bylaws and any shareholder agreement you may have.

Your instinct is right, you are not being treated fairly and need to do something now to protect your rights. Shareholders have many rights in California to protect you.

Let me list a few areas that would warrant your consideration:

1. Although the corporate issues may have to be addressed in a separate proceeding in the regular civil department of Superior Court, these issues also bear upon the property settlement aspect of your Family Court dissolution of marriage case, and you or your attorney need to be sure that through disclosure forms and other aspects of the dissolution proceeding that the judge is made aware of the corporate-management problems.

2. At an earlier stage of the dissolution proceedings, it might have been procedurally correct and efficient to file a separate civil action and have the court consolidate the matters. It's perhaps too late for that now.

3. The facts reek of breach of fiduciary duty - both that of a spouse to the other spouse and that of a director to the corporation and its shareholders.

4. The corporation is deadlocked, since it cannot obtain a majority vote of either directors or shareholders to approve any changes or transactions out of the ordinary couse of business. The Corporations Code provides two means to break deadlocks - involuntary dissolution under sections 1800 et seq. or court appointment of a provisional director, section 308.

5. Directors who breach fiduciary duties are subject to personal liability and/or removal uder various sections of the Corporations Code, e.g. 310 relating to voting on matters in which the director has a conflicting interest, and 506 regarding receipt of a prohibited distribution.

6. All shareholders of the same class must be paid dividends pro rata to their share holdings under Corps. Code section 701(d).

7. The corporation and your director-spouse are probably in violation of several other provisions of the Code, including those requiring annual meetings, notices, access to records, and the like.

I have handled business cases in California counties from Siskiyou to Imperial, and do not generally charge for travel to and from clients' locations or courthouses where my cases are pending. Please feel free to contact me for a further no-obligation analysis of your situation.