Legal Question in Business Law in Wisconsin

4 years ago, I started a small business, as a DBA. However I couldn't afford to keep the start up going. An acquaintance told me he would invest in the business to keep it going. There was never a contract, and no paperwork was ever signed. I recieved a check and put it into the business. Throughout the first year the company had trouble getting business, so it closed down. The acquaintance after 4 years has decided he wants his investment back, and has threatened a lawsuit. With no contract in place, no ownership in the company, can I be sued and have to repay his investment? We both lost money, and I feel bad, but I would like to know what my legal options are. Thank you.

Asked on 8/01/14, 4:53 pm

1 Answer from Attorneys

When your acquaintance invested his money to keep the business going, what was said about the investment? Was it a loan to be repaid, and if so, what time period and interest rate were discussed? Or was it simply equity money, and was he to get a percentage of the business as your new equity partner? Or did he just want his money back when the business got back on its feet?

In a vacuum, the investor may have a claim for money had and received, or for repayment of a loan if that was the case. Difficult to tell without all of the facts as to each person's understanding of just what the investment was?

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Answered on 8/03/14, 12:07 pm

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