My question involves bankruptcy in the state of: California.
I, along with another shareholder, were minority shareholders (15% each) in a startup C Corporation. Our business received a $150,000 SBA loan in March 2011, on which our CEO/President signed as personal guarantor.
Like many new businesses, we were struggling, and our operating capital was running out. However, things were looking better for us, as we had just made a couple of deals that were going to start bringing in revenue.
We were actively looking for outside help from investors to help us through the two months it would take to have everything in place to make good on the above mentioned business deals. An investor agreed to get involved with us, was very impressed with what we were doing and how we were generating attention in the press.
Things were looking up, right?
So, we were surprised when our CEO/President showed up and said he could no longer work with us and that our new investor was no longer interested in coming on board. Furthermore, he refused to allow us to continue with a separate fundraising drive we had been working on for over one month, which, by our estimates, would have brought in between $35,000 and $50,000, plenty to get us through the next couple months. There was no changing his mind. He was out, and he told us that we would have to change to Corporation's business name, as well, given that he owned the trademark for it and it was "one of the only things left of any value" of the business.
He would declare personal bankruptcy, default on the business loan, and the bank would liquidate our business.
All of the above has since happened, but not in that order.
But here is where it gets interesting.
As it turns out, on the eve of his "resignation" announcement, he sent our would-be investor all of our business "stuff". Original business plan, client/industry/investor contacts, projections, etc. Our CEO/President was starting a new, competetive business with the investor. Because our CEO regularly used one of our personal computers at work, we saw emails between our CEO and investor that state that their plan was for the new business to buy the old business' infrastructure from the bank during a liquidation sale. Our CEO's bankruptcy would give them a fresh start, since the old business had worked out the kinks and were on a number of investors' radars. They were actually shopping around a business/venture plan to investors stating that the old business was the new business' pilot program.
Our CEO filed personal bankruptcy 45 days ago. He owes me and my other partner $15,000 from personal loans. He didn't list us as creditors. He also failed to list his two previous addresses and another second, current address where he stores tools and equipment that is helping him generate income for his new business.
He failed to include some assets on his Voluntary petition (around $10,000). He stated $0 in income from 2011, but he was paid around $20,000 from our business.
And finally, even though the new business of his is not incorporated yet, he has received income from it, but didn't mention it --surprise-- on his Voluntary
Petition. The list goes on.
I'm not sure how to approach this situation, but I do think it's in my best interests to have his BK dismissed, so that I can go after him for the personal loan. I'm not sure if I should contact the Trustee. I mean, he did intentionally destroy an asset that he owned 70% of, and that his other partners had invested around $50,000 into, not to mention $150,000 from the bank.
The real problem for me is that I have been left penniless by this and my access to legal help is, well, extremely limited.
Sincere Thanks for taking the time to read this.