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Should I sue my friend to recover my investment? (alien.top)

submitted 2 years ago by Thirdfcuk@alien.top to c/entrepreneur@indiehackers.space

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Hi, I’m a freelance software developer. My friend had an LLC and wanted me to join him for a project to revamp his online store.

I invested 5k and entered only a profit-sharing scheme. I worked on top of it, being in charge of the project. If successful, the profit shares would have been a great return. Big IF but I knew the risks.

However, soon after starting I noticed that my friend had exaggerated his financials and had no plan as to what he wanted to achieve. Also, I had to incur extra costs like shopify themes and other tools that he said he would reimburse me for but made a lot of excuses to not pay them back.

Fast forward to a couple weeks after we started, he’s shutting down his LLC. I told him we should re-do the contract since I signed with his LLC if the project should continue. He’s gaslighting me into doubting him and telling me to just trust him and not worry about it. Obviously I’m not stupid and I’m catching onto his conman traits such as talking big and always mentioning his big past successes and the high profile people he knows.

Basically he has no intentions to re-do the contract and firm on not returning my money. He constantly reminds me “if you quit the investment is lost” (actual clause in the contract). No clause about what happens if the LLC disappears. What are my rights? 5% of me says I’m misreading the situation but my gut instinct is so strong on this one. I think I would sue and just lose this friend.

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[–] SpaceToaster@alien.top 1 points 2 years ago

Ouch. So basically instead of paying you to revamp the store he got you to pay him and do the work, and then shut down anyway after a few weeks?

Sorry you got hosed on this one. But here is where you may have something.

Since the company was dissolved: All assets and IP stay with the dead company, unless they are sold. All debts should be paid to outstanding balances. Any remaining funds must then we disbursed according to share percentages, in your case 5%.

You do not have any interest in a new company formed, nor does he have the right to use assets from the former company without reimbursing you, as you have a 5% stake in those assets.