From the Sperling Law Case Files: When Friends, Business and the Law Mix

As the old Proverb goes “Never Mix Business with Pleasure.” Many have taken this to mean “Don’t Do Business with Friends” and the like. But Alfred A. Montapert says “All Lasting Business is Built on Friendship”  Hmmmm… So which is it? Well, as this next case from the Sperling Law Files will illustrate, being friends and then becoming business partners and getting all legal about it can be “problematic.”

Here’s the story. Two friends, both women, decided to start a clothing business and they formed an LLC (Limited Liability Corporation) and started buying inventory to sell. One of the ladies convinced the other to put a lot of the LLC debt (over $100K) on her personal credit cards. (Does anyone see a problem yet?) So the company begins to have difficulties selling the products and the business just fizzles out. It happens.

Now, the debt on the personal cards remains and Dean Sperling is referred in on this collection matter for the woman who took on the LLC debt. And now this becomes a nasty little legal dispute back and forth with one of the ladies filing to dissolve the LLC with the Sec. of State and lawsuits being threatened in both directions.

Another wrinkle here is the other partner’s husband is an attorney and decides to represent his wife in this matter after representing both women from the start  (Note: this is frowned upon in our legal system due to the lawyer’s need to remain objective, etc.)  Dean reaches out and tells these parties that they should sell the remaining inventory (at discounted prices) and use the money to pay down this owed debt. The husband refuses and now is seeking damages from the other party (for some unknown reason). So Dean continues his work to negotiate a truce and a fair deal for his client while telling the other lawyer (the husband) that if he continues to represent his wife in this matter, Dean will file a motion to disqualify him.

So what do you get when friends, business and the law all mix together? A big ‘ol nasty mess. And right there wearing his rubber booths and cleaning all of this up is your favorite legal ace, Dean Sperling. Disputes happen every day between friends and non-friends alike. And when they drag YOUR business into it, you’ll want a seasoned litigator like Dean helping to resolve YOUR matter with YOUR best interests in mind.