Business partnership

Reetb

Sorry I could not find the right category for my question. But I do hope, if you cannot answer my query, to point me in the right direction. My problem is a bit complicated ...
I have been in a partnership with a friend and his son in a care home business. Initially, it was the father and I - He had 66.5% an I had 33.5% - he later gave his son 15% of the business and maintain 51% to maintain a majority shareholder status. The care home grew from a 9 bedded unit/1 building to 27 patients unit and 3 care home units. It has developed into a very good business and is seen a regional success story. We agreed not to use of dividends but to invest back the money in the business to reduce our debts. Over the last ten years the business has done very well and continues to improve. I am 74 yrs and I mentioned to my partners that I wish to resign(health being a problem) and it was agreed to evaluate the business and to offer the opportunity to buy my share. However, they refused for an independent evaluation and said that the bank insisted to undertake the estimation themselves (which I thought was not fair and would be biased). Indeed, the evaluation showed that the assets had depreciated over the last 10 years (from 3.7m to 3m) - that it was less that when we bought it !! and that the business was not doing well and put its multiples at 3 - which the figures show it is not true We had agreed to let the son run the business (so that he will gain experience) - For that he would earn around 50k a year. Now we found that he had converted his 15% shares into A shares ( his dad and I were maintained as B star holders) and instead of taking an annual payment (as agreed) he was cashing all the dividends around 175k a year !!! The business was making around 3300k profit a year - Now they are offering me to pay back my capital and interests only, not treating as a partner of the business but rather like someone who have given them a loan. Moreover, they are using the Company Accountant as their accountant to negotiate with me - (a conflict on interest for sure!) -  I have used an independent accountant to put my case - According to  his estimation I am entitled to circa 1.2m against their offer of 450k payable over a period of 5 years. They are not responding to our letters - Should I contact a lawyer ? Many thanks for your advice. Sorry it is a bit complicated    

visidigi

Definitely seek legal advice.

soolin

I’ll ask for this to be moved to a more appropriate board, but it would be helpful if you could edit your post to add some paragraphs as I am finding it very difficult to read as a solid wall of text. 

Manxman_in_exile

You own a third share in a business which has assets of about 3 million, makes about 3 million (£3000k?) profit a year, and where one of your partners has been helping himself to dividends out of those profits unbeknown to you.

Why are you posting on an internet forum?  Seek paid-for professional legal advice immediately!

cymruchris

Agree with the above - something like this isn't for random forum people to give opinions (although there are some knowledgeable members here) - definitely engage proper legal advice asap. 

Mistral001

The problem might be which lawyer.  Running a £3M care home for 10 years will probably have required the help of  legal advice in, both setting up the paprtnership, and in the day to day running of the business.   Using the present firm's solicitors might be a bit awkward, but on the other hand it might be very difficult to get another solicitor to advise the OP on partnrship affairs when there is already a solicitor advising the partnership

Manxman_in_exile

I'm not sure why it would be difficult for the OP as an individual to engage a solicitor to give him (or her) legal advice? 

Obviously they couldn't use whoever advises or has already advised the partnership itself, but I can't see why that would pose any particular problem for the OP in finding a solicitor to advise them.  Even if it's a "one horse town" that doesn't mean the OP can't go out of town.

I have no doubt whatsoever that legal disputes frequently arise within partnerships and that individual partners may often require independent and separate legal advice where there are clear conflicts of interest.   Must happen all the time.

Mistral001 said:

... on the other hand it might be very difficult to get another solicitor to advise the OP on partnrship affairs when there is already a solicitor advising the partnership

If you took that to its logical extreme, wouldn't it mean that everybody would find it difficult to get legal advice regarding any issue if there was already a lawyer advising the other side?  I'm not sure why having a solicitor (possibly) already advising the partnership would hinder the OP getting one to advise him (or her) as to the legal position.

Mistral001

Yes if there was a complete breakdown in trust between the partners, then another solicitor could be found to act for one partner against the other one, but from what the OP has wriiten, I do not think it is at that stage yet.