Unresponsive Business “Partner” - Short Sale

[Nicholas A.]

Hello,

My name is Nick. To make a really long story short, I have just completed a Short-Sale of a single-family home a business partner and I built in Horseshoe Bay, Texas, right outside of Austin, Texas.

Our Operating Agreement states that we are to split 50%/50% of all expenses within the business and treat any unexpected monies due as loans and paid back equally amongst the partners. Due to unexpected circumstances, I’ve had to come out of pocket probably close to about 50K or more since the inception of the project, and he’s made excuse after excuse as to why he has not been able to. Unfortunately, you cannot just tell your private lender or builder that you cannot make the payments, so I’ve covered all of the costs. At this point, and for the previous year, he’s been fairly and almost completely unresponsive to my messages outside of communication with our realtor and private lender. Now that the house has been sold and we no longer have to communicate with a realtor, this behavior is worse. 

We owe the lender a hefty sum due to the short sale, and my partner should be responsible for at least as much as I have paid into the deal so far. My “partner” has not come thru on his side of the deal. I am ready to file a lawsuit. 

Any guidance is gladly accepted and welcomed.

Thanks,

Nick

[Chris Seveney]

Quote from @Nicholas A.:

Hello,

My name is Nick. To make a really long story short, I have just completed a Short-Sale of a single-family home a business partner and I built in Horseshoe Bay, Texas, right outside of Austin, Texas.

Our Operating Agreement states that we are to split 50%/50% of all expenses within the business and treat any unexpected monies due as loans and paid back equally amongst the partners. Due to unexpected circumstances, I’ve had to come out of pocket probably close to about 50K or more since the inception of the project, and he’s made excuse after excuse as to why he has not been able to. Unfortunately, you cannot just tell your private lender or builder that you cannot make the payments, so I’ve covered all of the costs. At this point, and for the previous year, he’s been fairly and almost completely unresponsive to my messages outside of communication with our realtor and private lender. Now that the house has been sold and we no longer have to communicate with a realtor, this behavior is worse. 

We owe the lender a hefty sum due to the short sale, and my partner should be responsible for at least as much as I have paid into the deal so far. My “partner” has not come thru on his side of the deal. I am ready to file a lawsuit. 

Any guidance is gladly accepted and welcomed.

Thanks,

Nick

Do you know if this person has the money? When you vetted this partner did you check their financials?

Since it was a short sale, I would consider letting the private lender sue the entity first and you and him with the assumed guarantee as well. Hopefully you are not responsible for his portion from the private lender.

For what you are owed, yes you could start that lawsuit and i would start that one now.

[Randall Alan]

Quote from @Nicholas A.:

Hello,

My name is Nick. To make a really long story short, I have just completed a Short-Sale of a single-family home a business partner and I built in Horseshoe Bay, Texas, right outside of Austin, Texas.

Our Operating Agreement states that we are to split 50%/50% of all expenses within the business and treat any unexpected monies due as loans and paid back equally amongst the partners. Due to unexpected circumstances, I’ve had to come out of pocket probably close to about 50K or more since the inception of the project, and he’s made excuse after excuse as to why he has not been able to. Unfortunately, you cannot just tell your private lender or builder that you cannot make the payments, so I’ve covered all of the costs. At this point, and for the previous year, he’s been fairly and almost completely unresponsive to my messages outside of communication with our realtor and private lender. Now that the house has been sold and we no longer have to communicate with a realtor, this behavior is worse. 

We owe the lender a hefty sum due to the short sale, and my partner should be responsible for at least as much as I have paid into the deal so far. My “partner” has not come thru on his side of the deal. I am ready to file a lawsuit. 

Any guidance is gladly accepted and welcomed.

Thanks,

Nick

@Nicholas A.

Hi Nick,

Was the short sale house your only business together?  If not, maybe you could transfer value from another project in your portfolio at a “not 50/50” basis to compensate you for the disproportionate outlays on your part?  So as an example - make another project 75% yours versus 50/50.  That same concept could be used on a going forward basis as well.  “The next project we do I am  to be compensated for the excessive outlay on the last short sale.”  perhaps a simple conversation like that could solve things?

A lot depends on whether you want to hold your partnership together, or blow it up?  Without knowing more about the duration and other projects both past and future it’s hard to know what to recommend.  Likewise - what skills & value the other person brings to your partnership?  Are you the money and he is the hands guy for instance?  Is he (or someone like him) necessary to your existence in the business?

Likewise there is an “assets” consideration to think about.  Does he have assets he (or perhaps you) can access to be compensated by - either voluntarily or if you end up in a legal fight. 
Know that lawyers are expensive for both of you though, and they are happy to spend your money at $400/hr or whatever.  

Food for thought…

Randy

[Minna Reid]

If the partner has assets to pursue - start a lawsuit now. 

If he is broke, its just a waste of your time, and I would say cut your losses now and consider it a lesson learned.

[Don Konipol]

Quote from @Nicholas A.:

Hello,

My name is Nick. To make a really long story short, I have just completed a Short-Sale of a single-family home a business partner and I built in Horseshoe Bay, Texas, right outside of Austin, Texas.

Our Operating Agreement states that we are to split 50%/50% of all expenses within the business and treat any unexpected monies due as loans and paid back equally amongst the partners. Due to unexpected circumstances, I’ve had to come out of pocket probably close to about 50K or more since the inception of the project, and he’s made excuse after excuse as to why he has not been able to. Unfortunately, you cannot just tell your private lender or builder that you cannot make the payments, so I’ve covered all of the costs. At this point, and for the previous year, he’s been fairly and almost completely unresponsive to my messages outside of communication with our realtor and private lender. Now that the house has been sold and we no longer have to communicate with a realtor, this behavior is worse. 

We owe the lender a hefty sum due to the short sale, and my partner should be responsible for at least as much as I have paid into the deal so far. My “partner” has not come thru on his side of the deal. I am ready to file a lawsuit. 

Any guidance is gladly accepted and welcomed.

Thanks,

Nick

Take all the prior advice given and trash it.  One word: lawyer