FAILED DIRECTOR & PARTNER WALKS -NOW WANTS PAYBACK.

Hi there.
Was wondering if you could help me with some answers as to where we stand with this dubious friend.

We are (were) three partners in a newly formed Pty earlier this year. The person in question was a so called friend who we trusted.

I am 20% shareholder, my fiancé 40 % and the problem woman person 40 % stake.
Together my fiancé and I are the majority 60% shareholders.

Our friend business partner 40% shareholder & Director has told us she resigns & left her post after we had a dispute about her drawing money from our business account for the benefit of a third party competitor who she is in cahoots with silently.

About two months ago she took a man in and silently set this guy up by part way of using our business intellectual property.
This guy wasn’t even in the industry. She found this “love” off the internet and kinda took him in. We were not very happy about this, but nevertheless kept quiet as it wasn’t our business.
But this is not the issue.
When we confronted her about this conflict of interest, in setting up this guy to do similar work as ours, she said she is not a partner & has nothing to do with this guys business and that she was merely helping him.
She had drawing powers on our business account which we have now suspended due to the following.
When we were issued with an invoice from this third party guy that she had setup, we told her that she was not fulfilling her fiduciary duties as Director of our business & that there was a conflict of interest with this person/guy friend of hers. We told her that she is not acting in our companies best interests.
She went and procured products for our business but through this other guy of hers & then charged us, her own company, with a marked up invoice. She helped him procure the product and the invoice came from his business to ours.
We told her that we were not entertaining this particular invoice as the products could have been procured by way of herself acting for our own company as buyer and that she could have put these products onto one of our own supplier accounts. We told her that she needed to undo what she did and that we were not going to entertain that invoice from her & her partner.
We feel that this is enriching her partner and that she was being unfaithful to her own business and us.
The following day she cleared her desk & walked out of the office. She then proceeded to the bank where she blatantly withdrew money from our account to the effect of that invoice.
The following day we received an email from her saying that we would be hearing from her lawyer with her resignation and a proposal plan for her exiting the business as well as a payback suggestion plan.
She is now wanting all her money back that she put into our business & has emailed that we have 7 days to pay her or else she will look to alternative means meaning that she will look to foreclosure.
Over the last few months she compiled an expenses list & sent it behind our backs to our accountant who also never really kept us in the loop. (This accountant and bookkeepers were hers who she introduced us to)
I had to beg for the accountant to give us reconciliation and when she did, I was shocked. The figures were wrong & the expenses run up by her inappropriate. Things weren’t very clear.
We are in disagreement as to some of these elaborate expenses as to whether they are or were for the business.
I don’t think there is a loan account as such, but just a spreadsheet which came from this partner. We had no idea about this expense list and don’t have an agreement in place for this.
We have no signed written agreement in place that our company will pay her back.
A large number of the expenses receipts are also missing & all that stands is the item in the spreadsheet that was submitted to the accountant.

Where do we stand?
Our business has no cash flow to pay her back although we are breaking even at this stage & things are slowly improving. Her aim is to close us down, get us out of the way to open the market for her & this partner, so that they can supply our clients. We don't have a restraint of trade agreement with her nor any other written agreement including us paying her back. What about her bank statements. Will this act as receipts on her expenses to us? Half of these expenses are nonsense.
Is she entitled to lay claim against our business? We want to remain and continue with our business.

Any advices will be appreciated.
My email is giovanni@freshconnect.co.za

Thanking you.
Giovanni

Her actions were contrary to the business that she had with you and that normally is not legal.

So she is on very thin ice already. Seems to us you may sue HER for her actions, and collect from her. You certainly have good counterclaims if she files suit.

World Law's lawyers in South Africa (if that is where you are) or wherever could also probably intervene and help resolve this if need be. You may email them on the home page.