Q: Can my wife sue her former business partner for lying about finances and leaving all the debts to her?
Her business partner was the one handling all the expenses, all the finances. She was the CEO and he was the CFO, and he was lying about finances for a few months, wasn't paying rent, didn't pay one of the people who helped with an install, didn't pay several other important bills, and lied all the while about it. This has caused major issues. Can she sue to direct the debt to him since it was his responsibility and not hers?
A: Yes, your wife can likely sue her former business partner for lying about finances and leaving all the debts to her. How to proceed will depend on the details and her objectives. There are an infinite number of scenarios that could exist. If the business was formed and maintained properly, your wife shouldn't be personally responsible for the debts as they are corporation debts. I am assuming, however, there are many other concerns. The first concern is financing the law.
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A:
Your wife may have grounds to sue her former business partner for breach of fiduciary duty, fraud, and possibly for indemnification of the debts incurred due to his actions. As CFO, he had a legal obligation to manage the company’s finances honestly and in the best interest of the business. If he misrepresented the financial situation and failed to pay bills while hiding this from your wife, this could be considered a breach of that duty.
In addition to breach of fiduciary duty, she might also pursue a claim for fraud if he intentionally lied about the financial state of the business. This could help in seeking compensation for the damages caused by his misconduct. She may also be able to seek indemnification, meaning she could request that the court orders him to cover the debts that were left to her due to his failure to fulfill his responsibilities.
It would be wise to gather all relevant documentation, such as financial records, communication between them, and any evidence of his deceit, to support her case. Consulting with an attorney experienced in business disputes would be helpful in determining the best course of action and understanding her rights.
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