Legal Question in Business Law in California
I purchased invoices (factoring)from my daughters company to improve her cash flow and make interest on my money. When she had an invoice that wouldn't be paid for 30 days I would pay her 95% of the invoice then when it was paid 30 days later I would get 100% of the invoice. Her partner locked her out of the business and kept over 13,000.00 of invoiced I purchased. Is this a criminal or civil law suit?
2 Answers from Attorneys
Civil, I'd think.......it's hard to make out any crime here. Also, as you may know, while any citizen can discuss a possible criminal action with the police or the D.A., the action itself is brought by a public prosecutor (usually, the District Attorney) on behalf of the People of the State of California, not by any individual plaintiff. Also, I should caution you that in some cases factoring transactions have been held to be more in the nature of usurious loans than actual purchases of receivables. From the way you describe your deals with your daughter's company, they sound OK, but if you take your case to court I'd have your lawyer check any possible usury issues first, noting especially Baruch Investment Co. v. Huntoon (1967) 257 Cal.App.2d 485 and the cases cited therein.
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