Legal Question in Business Law in California

Re: Partner is ruining our corporation

The best way to get quick relief from a court is to file a suit and at the same time ask for a temporary restraining order (TRO).

An ordinary civil TRO is very different from the restraining orders used for harassment, domestic violence, etc., not only in how obtained, but also in duration and matters that can be restrained.

Your case would require looking at the corporate structure (Articles of Incorporation, bylaws, stock register and board meeting minutes) as well as the specifics of all of the wrongdoing and the status of the family law case. It could become fairly complicated.

Nevertheless, I think a judge could be persuaded to issue a TRO to put a short-term halt to the damage and bleeding. A civil TRO is good for about two weeks, at which time the judge will hold a hearing on whether the TRO should be replaced with a preliminary injunction (PI). The PI replaces the TRO and is good until the trial and judgment.

I can conceive of a suit that would allege various kinds of misconduct by your co-shareholder in this corporation, where an accompanying request for a TRO would likely be granted and could be designed so as to plug the hole in the dike for long enough that the business does not go down the drain due to his indiscretions.

Obviously, there are no guarantees, but the whole purpose of TROs is to prevent "irreparable harm" while a suit is awaiting trial.

It sounds as though you are personally liable on the contruction loan, probably because the two of you had to guarantee it personally.

I don't know what to say about the concern that the court might appoint a referee or trustee; that can happen, but often only when a party requests the appointment. I'm more inclined to think that if properly presented, a judge might grant a TRO giving you temporary control. This could depend upon whether and how he opposes the TRO.

In any event, these are suggestions and not necessarily recommendations, but I would be willing to review your possible case (gratis) and give you a better recommendation based on more information.