Pursuing a business partner to account for spending
Discussion
Bit of an unusual one here. I'm helping someone who has lost a lot of money to try to recover it, or at least find out where it's gone. The story is; last year she invested money in a business venture with someone she considered a very good and trustworthy friend like a brother to me is how she described him. She transferred money to his account (after refusing to give him cash). To date she has had no return on the money, she is not aware of any legitimate business activities that have been carried out and has been given no proper account of where the money has gone.
She does know that he has told several lies in relation to property he allegedly bought in relation to the business - including one regarding the theft of a van purchased on finance during a burglary at his unit which never happened and various other accounts of spending he claims to have undertaken but has provided no actual evidence of anything in the form if receipts and suchlike.
He has been given a formal demand by her today to provide a full account of his spending, with evidence of same, under Section.28 of The Partnership Act 1890 which he has refused.
So, question is how do we pursue this? It seems reasonable that she needs firm evidence of wrongdoing before any County Court claim for money can be made? Do we make an application to a Court (High Court?) to require him to formally produce the information? Do we apply for access to his banking details so that we can trace what the money has been spent on? He has previously made intimations that he has other business assets and suchlike so we strongly suspect that he may have used her money for those. We need to find out specifically where the money has gone before she can try to reclaim it and given that it was transferred to him via the banks this is the only reasonable way of finding it.
We could just hand all this over to a solicitor but costs are just going to become ridiculous so we prefer to do as much as possible ourselves.
She does know that he has told several lies in relation to property he allegedly bought in relation to the business - including one regarding the theft of a van purchased on finance during a burglary at his unit which never happened and various other accounts of spending he claims to have undertaken but has provided no actual evidence of anything in the form if receipts and suchlike.
He has been given a formal demand by her today to provide a full account of his spending, with evidence of same, under Section.28 of The Partnership Act 1890 which he has refused.
So, question is how do we pursue this? It seems reasonable that she needs firm evidence of wrongdoing before any County Court claim for money can be made? Do we make an application to a Court (High Court?) to require him to formally produce the information? Do we apply for access to his banking details so that we can trace what the money has been spent on? He has previously made intimations that he has other business assets and suchlike so we strongly suspect that he may have used her money for those. We need to find out specifically where the money has gone before she can try to reclaim it and given that it was transferred to him via the banks this is the only reasonable way of finding it.
We could just hand all this over to a solicitor but costs are just going to become ridiculous so we prefer to do as much as possible ourselves.
How much is involved? Is there anything in writing regarding repayment?
I think a court might consider that the money was for investing in a business and therefore that the lender might reasonably have known they could lose as well as gain. As for criminal activity/fraud, that's a different matter I suspect. He sounds like an accomplished conman to me.
I think a court might consider that the money was for investing in a business and therefore that the lender might reasonably have known they could lose as well as gain. As for criminal activity/fraud, that's a different matter I suspect. He sounds like an accomplished conman to me.
No, there was no formal contract. However, we have dozens of messages describing what the arrangement was supposed to be. There is no question that it was supposed to be a business arrangement.
And, yes, I'm convinced he is a fairly accomplished con man and, to be honest, was from the outset. Without going into too much personal detail - the person providing the money was a young female (in her teens) and vulnerable to manipulation at the time having recently lost her mother. As it happens, she also has a separate judgement against this person in respect of a "loan" which he never paid back. He's an abusive, manipulating scumbag, basically.
And, yes, I'm convinced he is a fairly accomplished con man and, to be honest, was from the outset. Without going into too much personal detail - the person providing the money was a young female (in her teens) and vulnerable to manipulation at the time having recently lost her mother. As it happens, she also has a separate judgement against this person in respect of a "loan" which he never paid back. He's an abusive, manipulating scumbag, basically.
JPJPJP said:
The partnership act may not apply if she simply ‘gave him the money’
Where is the partnership agreement? Why not give the money into the partnership’s bank account?
Etc
Because she was young, vulnerable, naïve and subject to coercion. There are plenty of messages agreeing that it was to be treated as a partnership though. Where is the partnership agreement? Why not give the money into the partnership’s bank account?
Etc
AJL308 said:
No, there was no formal contract. However, we have dozens of messages describing what the arrangement was supposed to be. There is no question that it was supposed to be a business arrangement.
And, yes, I'm convinced he is a fairly accomplished con man and, to be honest, was from the outset. Without going into too much personal detail - the person providing the money was a young female (in her teens) and vulnerable to manipulation at the time having recently lost her mother. As it happens, she also has a separate judgement against this person in respect of a "loan" which he never paid back. He's an abusive, manipulating scumbag, basically.
Just because something is a "business arrangement" does not imply there was a "business partnership" in place.And, yes, I'm convinced he is a fairly accomplished con man and, to be honest, was from the outset. Without going into too much personal detail - the person providing the money was a young female (in her teens) and vulnerable to manipulation at the time having recently lost her mother. As it happens, she also has a separate judgement against this person in respect of a "loan" which he never paid back. He's an abusive, manipulating scumbag, basically.
One of the essential signs that a business partnership exists is that ALL parties involved are fully aware that they are each "jointly and severally" liable for ALL the liabilities of the partnership. So, unless your friend entered into this arrangement fully aware that she was taking on ALL the debts that this business venture might generate, then she would not be able to claim that she was in a business partnership.
My expectation is that there is no way she would have entered into such an arrangement and that therefore no partnership ever existed.
AJL308 said:
As it happens, she also has a separate judgement against this person in respect of a "loan" which he never paid back.
Hopefully that was afterwards, as you'd hardly lend more money to someone you'd taken to court for not repaying a loan... would you?Did she do anything to enforce judgement?
Going forwards if you think there's a case: https://www.moneysavingexpert.com/reclaim/small-cl...
Eric Mc said:
AJL308 said:
No, there was no formal contract. However, we have dozens of messages describing what the arrangement was supposed to be. There is no question that it was supposed to be a business arrangement.
And, yes, I'm convinced he is a fairly accomplished con man and, to be honest, was from the outset. Without going into too much personal detail - the person providing the money was a young female (in her teens) and vulnerable to manipulation at the time having recently lost her mother. As it happens, she also has a separate judgement against this person in respect of a "loan" which he never paid back. He's an abusive, manipulating scumbag, basically.
Just because something is a "business arrangement" does not imply there was a "business partnership" in place.And, yes, I'm convinced he is a fairly accomplished con man and, to be honest, was from the outset. Without going into too much personal detail - the person providing the money was a young female (in her teens) and vulnerable to manipulation at the time having recently lost her mother. As it happens, she also has a separate judgement against this person in respect of a "loan" which he never paid back. He's an abusive, manipulating scumbag, basically.
One of the essential signs that a business partnership exists is that ALL parties involved are fully aware that they are each "jointly and severally" liable for ALL the liabilities of the partnership. So, unless your friend entered into this arrangement fully aware that she was taking on ALL the debts that this business venture might generate, then she would not be able to claim that she was in a business partnership.
My expectation is that there is no way she would have entered into such an arrangement and that therefore no partnership ever existed.
Her issue is that the money she invested has been entirely controlled by him (because he's an abusive manipulator of vulnerable people) and that he has provided no account of any of his spending on behalf of the business and has provided her with several probable lies as to where it has gone. One involved the theft of a vehicle which was bought with partnership money which we categorically know did not happen and the police have confirmed that as being the case. She wants an account of his spending, as she is entitled to, and when she proves that to be a lie, access to his bank account so that she can trace the money.
Edited by AJL308 on Thursday 24th September 14:14
Edited by AJL308 on Thursday 24th September 14:15
Simpo Two said:
AJL308 said:
As it happens, she also has a separate judgement against this person in respect of a "loan" which he never paid back.
Hopefully that was afterwards, as you'd hardly lend more money to someone you'd taken to court for not repaying a loan... would you?Did she do anything to enforce judgement?
Going forwards if you think there's a case: https://www.moneysavingexpert.com/reclaim/small-cl...
AJL308 said:
So, question is how do we pursue this? It seems reasonable that she needs firm evidence of wrongdoing before any County Court claim for money can be made? Do we make an application to a Court (High Court?) to require him to formally produce the information? Do we apply for access to his banking details so that we can trace what the money has been spent on? He has previously made intimations that he has other business assets and suchlike so we strongly suspect that he may have used her money for those. We need to find out specifically where the money has gone before she can try to reclaim it and given that it was transferred to him via the banks this is the only reasonable way of finding it.
The issue you have is how you prove this was a partnership.You have messages, but nothing formalised. Scumbag could feasibly claim there were message conversations but nothing came of it, then your friend gifted him some money.
In order to either claim the money back or seek justification for it's use, you really need to have something in writing confirming what the money was handed over to him for and under what terms. I fear you don't have anything approaching that.....
How much are we talking? Hundreds? Thousands? Tens of thousands?
The question isn't to rubberneck the problem, it's to assess how much effort should be put into it's recovery.
She is not a partner, shareholder or director.
In the absence of official documentation, all she can consider herself to be is an investor and and informal one at that. Investment carries risk, the ultimate being that you might not get it back and where investment is made outside of normal regulatory control (as is the case here), that risk is increased exponentially.
Messages suggesting otherwise may be of use in court but likely that any competent Lawyer would navigate around them.
I'm finding it difficult to see any crumb of comfort to be honest and would bet a beer she'll not see the money again. That's not to say she shouldn't try but I would avoid spending too much on trying.
You say she's 'vulnerable'. That's a broad church but those that fall into this category often have a modicum of oversight support and if that's the case, I would asking questions to those responsible for this.
In the absence of official documentation, all she can consider herself to be is an investor and and informal one at that. Investment carries risk, the ultimate being that you might not get it back and where investment is made outside of normal regulatory control (as is the case here), that risk is increased exponentially.
Messages suggesting otherwise may be of use in court but likely that any competent Lawyer would navigate around them.
I'm finding it difficult to see any crumb of comfort to be honest and would bet a beer she'll not see the money again. That's not to say she shouldn't try but I would avoid spending too much on trying.
You say she's 'vulnerable'. That's a broad church but those that fall into this category often have a modicum of oversight support and if that's the case, I would asking questions to those responsible for this.
The other thing to have in mind as this is pursued: has he got anything with which to repay her anyway?
Sure, the principle of winning a claim and proving the money is owed and that the chap is a wrong 'un is all well and good. But if he hasn't got anything and is never likely to have anything, what's the point practically?
The best outcome might be to identify that there has been a criminal act committed and push to have that case pursued to the fullest extent of the law by the police / cps.
Sure, the principle of winning a claim and proving the money is owed and that the chap is a wrong 'un is all well and good. But if he hasn't got anything and is never likely to have anything, what's the point practically?
The best outcome might be to identify that there has been a criminal act committed and push to have that case pursued to the fullest extent of the law by the police / cps.
Muzzer79 said:
AJL308 said:
So, question is how do we pursue this? It seems reasonable that she needs firm evidence of wrongdoing before any County Court claim for money can be made? Do we make an application to a Court (High Court?) to require him to formally produce the information? Do we apply for access to his banking details so that we can trace what the money has been spent on? He has previously made intimations that he has other business assets and suchlike so we strongly suspect that he may have used her money for those. We need to find out specifically where the money has gone before she can try to reclaim it and given that it was transferred to him via the banks this is the only reasonable way of finding it.
The issue you have is how you prove this was a partnership.You have messages, but nothing formalised. Scumbag could feasibly claim there were message conversations but nothing came of it, then your friend gifted him some money.
In order to either claim the money back or seek justification for it's use, you really need to have something in writing confirming what the money was handed over to him for and under what terms. I fear you don't have anything approaching that.....
How much are we talking? Hundreds? Thousands? Tens of thousands?
The question isn't to rubberneck the problem, it's to assess how much effort should be put into it's recovery.
So, if we leave aside the questions of whether there indeed was a partnership in existence, or any type of business relationship, and we take it that there was; the Partnership Act requires a partner to provide a proper account of his activities and use of partnership money. He refuses to do so. That being the case, to which Court do we apply in order to compel him to do so?
JPJPJP said:
The other thing to have in mind as this is pursued: has he got anything with which to repay her anyway?
Sure, the principle of winning a claim and proving the money is owed and that the chap is a wrong 'un is all well and good. But if he hasn't got anything and is never likely to have anything, what's the point practically?
The best outcome might be to identify that there has been a criminal act committed and push to have that case pursued to the fullest extent of the law by the police / cps.
Yes, all that agreed. However, and I think it is perfectly reasonable to to take this course of action, she wants to know where, specifically, this money has been spent. He may not have anything (I think he probably doesn't) but she doesn't know that for certain and doesn't know whether her money has been passed to other people and whether she may have a claim against them. Sure, the principle of winning a claim and proving the money is owed and that the chap is a wrong 'un is all well and good. But if he hasn't got anything and is never likely to have anything, what's the point practically?
The best outcome might be to identify that there has been a criminal act committed and push to have that case pursued to the fullest extent of the law by the police / cps.
She simply doesn't know and wants to know where it has gone. When she knows that she can decide whether to pursue it further or who else she might need to pursue.
AJL308 said:
Muzzer79 said:
AJL308 said:
So, question is how do we pursue this? It seems reasonable that she needs firm evidence of wrongdoing before any County Court claim for money can be made? Do we make an application to a Court (High Court?) to require him to formally produce the information? Do we apply for access to his banking details so that we can trace what the money has been spent on? He has previously made intimations that he has other business assets and suchlike so we strongly suspect that he may have used her money for those. We need to find out specifically where the money has gone before she can try to reclaim it and given that it was transferred to him via the banks this is the only reasonable way of finding it.
The issue you have is how you prove this was a partnership.You have messages, but nothing formalised. Scumbag could feasibly claim there were message conversations but nothing came of it, then your friend gifted him some money.
In order to either claim the money back or seek justification for it's use, you really need to have something in writing confirming what the money was handed over to him for and under what terms. I fear you don't have anything approaching that.....
How much are we talking? Hundreds? Thousands? Tens of thousands?
The question isn't to rubberneck the problem, it's to assess how much effort should be put into it's recovery.
So, if we leave aside the questions of whether there indeed was a partnership in existence, or any type of business relationship, and we take it that there was; the Partnership Act requires a partner to provide a proper account of his activities and use of partnership money. He refuses to do so. That being the case, to which Court do we apply in order to compel him to do so?
£1m has a very different answer to £5000.
AJL308 said:
JPJPJP said:
The other thing to have in mind as this is pursued: has he got anything with which to repay her anyway?
Sure, the principle of winning a claim and proving the money is owed and that the chap is a wrong 'un is all well and good. But if he hasn't got anything and is never likely to have anything, what's the point practically?
The best outcome might be to identify that there has been a criminal act committed and push to have that case pursued to the fullest extent of the law by the police / cps.
Yes, all that agreed. However, and I think it is perfectly reasonable to to take this course of action, she wants to know where, specifically, this money has been spent. He may not have anything (I think he probably doesn't) but she doesn't know that for certain and doesn't know whether her money has been passed to other people and whether she may have a claim against them. Sure, the principle of winning a claim and proving the money is owed and that the chap is a wrong 'un is all well and good. But if he hasn't got anything and is never likely to have anything, what's the point practically?
The best outcome might be to identify that there has been a criminal act committed and push to have that case pursued to the fullest extent of the law by the police / cps.
She simply doesn't know and wants to know where it has gone. When she knows that she can decide whether to pursue it further or who else she might need to pursue.
And in the absence of official documentation, he is under no obligation to reveal to her what he did with it unless criminal action is suspected by the authorities and it is only they that can demand this information.
Gassing Station | Business | Top of Page | What's New | My Stuff