Just need to vent
 

Looks like I’m being sued. Yayyy!

Stupid ex-business (SEBP) partner signed a contract with a consultant in Jan. 2014. I didn’t know anything about the contract. Our attorney, who does all our contracts, wasn’t involved. The contract was with an ad agency my SEBP was running, but he put our company’s name on it! SEBP went off on his own in Jan. 2015 and left the ad agency in my lap. I told the contractor if he could make any money for the company he could have the money and the company too, as I wanted nothing to do with it. He kept getting $1500 a month and coming in monthly with promises of big things to come, but no work. After six months of this crap, in June 2015, I told him I was closing the agency and he was fired. He begged and pleaded, told me he had big things right around the corner, and he would work for $500 a month. Stupidly, I gave him another chance. Over the next year I spent $6000 on him and he brought in $4500 worth of work and more lofty promises. June 2016 I told him I was really closing the agency this time and he was fired. Then he drags out this contract – first time I’d ever seen it - which says he gets paid $1500 a month. He demands to be paid the $12000 “back pay” he would have gotten if we hadn’t made the verbal agreement to save his job 12 months ago. Plus, he wants $3000 because the contract says he gets 60 days notice of cancellation.
When given the option of getting fired or offering to take a cut in pay, he was OK with less money. He knew all along that the contract existed, and he knew I was unaware of it. This was deliberate subterfuge. Both my accountant and my attorney point out that $15,000 is relatively peanuts and I should just pay it and move on.
This guy and his wife became friends with my wife. They have been in our home, sat at our table, and when his wife became ill we sat with him while he cried about his wife’s illness.
Makes me sick to think this slimeball was actually in our home. I should have kicked him in the nuts while he was crying.
I’m just venting. I know all the things I did wrong. My accountant, who knows my business well, said a most comforting thing. “Your ex-partner left you with a big bucket of **** and vomit. This contractor is just more of the **** and the vomit. It's been over a year, the bucket is about empty now.” It’s a comfort to think of this prick as a pile of **** and vomit.

Sounds like one of those "what's the price of a clear conscience" stories.

Sorry

That sucks all around.

I'm not a savvy businessman but I say pay him to get the fark out of your life, IN WRITING, and then kick him in the nuts for good measure.

If you kick him in the nuts, it will cost you a lot more.

I would take the advice of your attorney and accountant, pay the money, and move on with life- and never talk to the SOB again. It sounds like he will self destruct in the end, best in the long run not to have it on your conscious.

He has to a hire a lawyer too... there is cost on his end...

Have your lawyer draft a settlement for some token amount ($3000?) to make it go away...

I had a commercial tenant that owed by 100k. I settled for 10k because I didn't want the hassle, and I knew that even if I won, he didn't have anywhere near 100k...

Curious though, if the contract is with the llc, and the LLC is closing... why is it your lawyer and accountant advise you to pay? If the llc goes belly up... that's it, right?

If he hires a labor lawyer they will be going for overtime, claim hourly wages etc, you'll be at 50-60k for a year easy.

This guy ain't stupid. Have him sign an agreement and make it go away....

****ing dip****

^^
The good news here is that he was never an employee. That is not in dispute.
I'm in kind of a sturm und drang with my lawyer about this. He says pay up and move on. My pissed off, totally irrational self says, if I can make it cost him $15,000 in atty fees to pursue this case and I lose, I only have to pay him $15k and pay my lawyer - probably also $15k. So it will cost me $30k to "win." Yes, I said it was my irrational self, but I can't stand the thought of giving in to extortion by a cheap slimeball. Victory is never cheap - but I'm still trying to define "victory."

Just, wow. People can really suck.

Tell him your giving him his 60 days notice but he has to work the next 60 days. Then I would give him so much **** to do he would have wished he would have just left.

The victory is getting this character and all his doings in the rear view quickly.

You are not going to gain much but headaches in a protracted battle.

In think the low counteroffer is worth a try.

Offer him a third-he may take it and run

Do make a very low offer and come up a bit to make him feel like he got a reach around. Do it through your attorney and make sure you have that bottom feeder attorney tell your adversary to mention legal costs if this is pursued.

You could also sue your former partner. Make him a party to the law suit that might be filed against you. Drag everybody down if you have to. No reason for you to bear the cost of this alone.

What if you don't pay? I'd say GL with that for the guy. I would definitely not just pay.

G

Have a lawyer explain offer him $3,000 without prejudice as a final resolution. Give him 48 hours to accept. Tell him after that you will fight it the bitter end.

My guess is he will see this as easy money and take it.

You like we should break his knee caps ? Or perhaps a midnight burlap bag party ?

Now, I'm not a lawyerly type, but I don't understand how his contract with someone else (even if it was a company) is more powerful than your verbal contract with him to change his pay schedule?

I would give him 60 days notice, get any work out of him you can, pay him the last $1000 (which is his current fee schedule), and walk away. I wouldn't even offer the $3000 he wants, which is based on a nullified contract.
But, I ain't lawyerly.

Is the company name that is on the contract the one that you closed? Is the company a LLC or incorporated? If so, he can only sue the company and not you personally. If the company is closed and there are no assets, then there is nothing he can collect on. Your attorney should know this.

As I understand the OP, the company named on the contact is not closing--an agency within the company is what's being closed.

To your other points--is the company an LLC or incorporated--those are not clear, but it is likely the contractor is suing the company, not him personally. My guess is the lawyers see a great deal of confusion in the contract, the existence of a separate agency, the acknowledgement by the company (the OP) that the contract is valid due to his actions after the partner left, and this tangled mess leaves open room for a suit that could go either way. Smart move would be to pay up and get past it.

No. My SEBP put the corporate name on the contract, even though he had the guy working for the LLC.
I just spoke to my attorney again. It doesn't look good. We made and offer for $3000 and his attorney said he would not recommend that to his client.
The contract my SEBP signed was a real doozy. It says we pay him $1500 a month for 10 hrs work. Any additional work would be billed at $150 an hour. His invoices show him working 20 hours some months (which is total BS), even though he only billed for $1500. So my attorney says he could come back and demand the $1500 a month PLUS the $150 an hour for the months he worked over 10 hours.
We're waiting for the summons. This could get nasty.