What is the name of your state (only U.S. law)?
Texas
Hello,
6 months ago my mother and stepfather left california for texas to start a business. They formed a C class corporation, and after purchasing a business (laundrymat) they rolled my stepdads 401k into the corporate business account. After purchasing the business they had 25k$ in the corporate account and 10k$ stashed in another 401k. I didn't get many of the details (which i will gladly do if you just tell me what to ask) but from what I understand the money was just loaned from my stepdads 401k and wasnt allowed to be spent on anything but expenses for the business itself, and had to be repaid back into the corporate account before any profits could be taken...
My mother signed the corporate documents as the ceo, executive, administrator.. or some other title but as far as I gather she was the person in charge. My stepfather signed as the Secretary of the corporation. My 62 year old Great Uncle and I worked in the laundromat for No pay, for 3 months. We gutted and rebuilt the bathroom, tore up and laid tile, hung drywall, painted.. Hard construction work, not just mopping floors
Due to reasons that are irrelevant to this column (3 months later) my mother and stepfather split up (not divorced yet). and for the next 3 months she lived and managed the business with her new spouse. She opened a new account and transfered funds out of the corporate account (which i think is illegal, perhaps embezzlement? (spchk)... she used the money to furnish a new apartment (including a giant flatscreen TV which was supposed to be for the business but ended up in her house), rent, traffic tickets, and other expenses. I do know for a fact she spent a small amount of money on the business resurfacing some countertops, getting vending machines installed, and on some industrial size air conditioning units (which she took with her, for god knows what reason) We hadn't heard from her in that time.
A week ago she contacted me to explain that she was attempting to sell the business (for 40k$), that it had not made its expenses for the past 3 months, and that she had resigned from the corporation. She also said that the money in the corporate account was gone, that she hadn't paid rent on the business location in a while but the landlord would "work with us". She gave me the keys and claimed that all the paperwork was being priority mailed to my stepdad. From what I understand she was loaned money from a relative to rent a u-haul which she packed and left for Oregon.
Thursday I got down to the laundrymat for the first time in 3 months. She had left it in the care of a homeless man who was working under the table for 100$ a month. After opening the washers and dryers I found 1.25$ exactly, in every machine.. even the ones in disrepair that were taped off and obviously not operational. After collecting the quarters I opened the change machine to find no more than 30$ in bills, in a change machine thats empty of quarters... that held close to 800$ in change every time I was ever working there. On estimate there was between 150-200$ in quarters left which means a large portion of them were taken as well. So I loaded the change machine with quarters and went home.
Today (monday) I returned to the mat to check the results and see how things were running. The change machine was once again out of quarters, and many of the washers and dryers had between 4-10$ in quarters in them after only 4 days of operation. I found 0$ in bills inside the change machine, and all 3 of the containers were almost empty of quarters. I have reason to believe that my mother copied the keys to the machine and gave them to one of her friends in order to keep taking the profits from the business after she left. I got rid of the old locks and put new ones on that only I have keys to, so that wont be happening again.
So now that you've heard my story, here come the questions:
1. My stepdad, What should he do? She is obviously trying to dump this in his lap after she used up (and stole) all the money.
2. Me, What am I liable for here? Am I guilty of anything for working at a family business for no pay? Am I owed anything? I did not sign any documents relating to the corporation, my name isnt on any of the paperwork, Ive lived in the same house with my stepdad this whole time.
3. Can we Sell the business? Is there any way to get out from under this thing safely without us losing house and home? Will we get to keep any of the money from the sale or would it just go towards paying off the debts my mother racked up?
4. The 10k$ in the corporate 401k account was only in my stepdad's name. She wasnt supposed to be able to touch that, and we'll know wednesday if it's still intact. Is there any way for us to access that to try and keep things afloat while we sort this whole thing out?
5. My mother. What is she guilty of? How to we go about reporting her through the proper channels to ensure that she is held responsible for these crimes? I don't want her to go to jail but if her mistakes overflow onto my stepdad I'd rather have her go than him.
6. Divorce. Should my stepdad divorce my mother before or after the sale? ASAP? Please give feedback on the timeframe were looking at for that to process as well (how long will it take).
7. Bankruptcy. Does the corporation need to file it? Will it help things go more smoothly during my parents divorce? Basically what Im interested in is getting back as much of my stepdads retirement as possible, and getting rid of the business alltogether as soon as we can.
I'm 23 years old so I comprehend most legal terminology despite my atrocious spelling. So feel free to throw around the legal jargon I also realize you must have a high volume of forum topics to handle, and this might rank low on your priorities list but I apreciate any advice you can give in these matters.
Thank you for your time and patience,
TheO
Texas
Hello,
6 months ago my mother and stepfather left california for texas to start a business. They formed a C class corporation, and after purchasing a business (laundrymat) they rolled my stepdads 401k into the corporate business account. After purchasing the business they had 25k$ in the corporate account and 10k$ stashed in another 401k. I didn't get many of the details (which i will gladly do if you just tell me what to ask) but from what I understand the money was just loaned from my stepdads 401k and wasnt allowed to be spent on anything but expenses for the business itself, and had to be repaid back into the corporate account before any profits could be taken...
My mother signed the corporate documents as the ceo, executive, administrator.. or some other title but as far as I gather she was the person in charge. My stepfather signed as the Secretary of the corporation. My 62 year old Great Uncle and I worked in the laundromat for No pay, for 3 months. We gutted and rebuilt the bathroom, tore up and laid tile, hung drywall, painted.. Hard construction work, not just mopping floors
Due to reasons that are irrelevant to this column (3 months later) my mother and stepfather split up (not divorced yet). and for the next 3 months she lived and managed the business with her new spouse. She opened a new account and transfered funds out of the corporate account (which i think is illegal, perhaps embezzlement? (spchk)... she used the money to furnish a new apartment (including a giant flatscreen TV which was supposed to be for the business but ended up in her house), rent, traffic tickets, and other expenses. I do know for a fact she spent a small amount of money on the business resurfacing some countertops, getting vending machines installed, and on some industrial size air conditioning units (which she took with her, for god knows what reason) We hadn't heard from her in that time.
A week ago she contacted me to explain that she was attempting to sell the business (for 40k$), that it had not made its expenses for the past 3 months, and that she had resigned from the corporation. She also said that the money in the corporate account was gone, that she hadn't paid rent on the business location in a while but the landlord would "work with us". She gave me the keys and claimed that all the paperwork was being priority mailed to my stepdad. From what I understand she was loaned money from a relative to rent a u-haul which she packed and left for Oregon.
Thursday I got down to the laundrymat for the first time in 3 months. She had left it in the care of a homeless man who was working under the table for 100$ a month. After opening the washers and dryers I found 1.25$ exactly, in every machine.. even the ones in disrepair that were taped off and obviously not operational. After collecting the quarters I opened the change machine to find no more than 30$ in bills, in a change machine thats empty of quarters... that held close to 800$ in change every time I was ever working there. On estimate there was between 150-200$ in quarters left which means a large portion of them were taken as well. So I loaded the change machine with quarters and went home.
Today (monday) I returned to the mat to check the results and see how things were running. The change machine was once again out of quarters, and many of the washers and dryers had between 4-10$ in quarters in them after only 4 days of operation. I found 0$ in bills inside the change machine, and all 3 of the containers were almost empty of quarters. I have reason to believe that my mother copied the keys to the machine and gave them to one of her friends in order to keep taking the profits from the business after she left. I got rid of the old locks and put new ones on that only I have keys to, so that wont be happening again.
So now that you've heard my story, here come the questions:
1. My stepdad, What should he do? She is obviously trying to dump this in his lap after she used up (and stole) all the money.
2. Me, What am I liable for here? Am I guilty of anything for working at a family business for no pay? Am I owed anything? I did not sign any documents relating to the corporation, my name isnt on any of the paperwork, Ive lived in the same house with my stepdad this whole time.
3. Can we Sell the business? Is there any way to get out from under this thing safely without us losing house and home? Will we get to keep any of the money from the sale or would it just go towards paying off the debts my mother racked up?
4. The 10k$ in the corporate 401k account was only in my stepdad's name. She wasnt supposed to be able to touch that, and we'll know wednesday if it's still intact. Is there any way for us to access that to try and keep things afloat while we sort this whole thing out?
5. My mother. What is she guilty of? How to we go about reporting her through the proper channels to ensure that she is held responsible for these crimes? I don't want her to go to jail but if her mistakes overflow onto my stepdad I'd rather have her go than him.
6. Divorce. Should my stepdad divorce my mother before or after the sale? ASAP? Please give feedback on the timeframe were looking at for that to process as well (how long will it take).
7. Bankruptcy. Does the corporation need to file it? Will it help things go more smoothly during my parents divorce? Basically what Im interested in is getting back as much of my stepdads retirement as possible, and getting rid of the business alltogether as soon as we can.
I'm 23 years old so I comprehend most legal terminology despite my atrocious spelling. So feel free to throw around the legal jargon I also realize you must have a high volume of forum topics to handle, and this might rank low on your priorities list but I apreciate any advice you can give in these matters.
Thank you for your time and patience,
TheO
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