Different views needed

[Greenbug]

OK, here goes. The corporation I was given 52% of turns out they will give it all to me to take over. It is a landscape supply store that does some really nice landscapes in my area. We have contract with all the major builders here in town, including private party clientèle. 20-60,000 dollar jobs most of them and we are busy when other landscaping companies are not. I have been talking with attorneys for the last two weeks about this "take over" and also overseeing the jobs in progress. I literally wholesaled all of the products including the trucks and trailers, I have enough rock, sod and bark to do a freaking national park in my front yard! (Thanks God I live on some land)

Here is my dilemma, the initial investor was a retired hair dresser who is 58, the guy that was in control and lost all of the money and now has the company 58k in debt turns out to be a CON-MAN, pedophile, and a pretty unsavory character. BUT he has the client base that is wide ranging and he does good work.

I am really struggling with the pedophile thing, he was convicted of "intent" to have lewd acts with a minor under the age of 16. His is listed on the state web site for "Megan's law" He is also a pathological liar which is hard to see threw sometimes.

From a businesss stand point I have already told him he needs to be a consultant or sales person and NOT under the employ of the actual company.
My thinking was pick up his client base in the process then cut him loose, but I have some severe reservations. The real issue for me is trying to help this lady who was truly just taken advantage of to the tune of 120k. She is the other half of the company, well was. The lady is having a hard time letting this guy go since he owes her so much money. In essense if I help her I help him, I have already told them both if he becomes a bigger liabilty then asset he is gone.

So do I take the money or the moral high ground?

~GB

[Gooch]

Originally Posted by Greenbug

So do I take the money or the moral high ground?

~GB

The moral high ground has always made me more comfortable than any ammount of money but thats just me.

[Greenbug]

I am definately leaning that way, but it is allot harder then I ever would have thought. This is a cash cow and I would also letting down this retired lady which is the only thing that has kept me in the picture at all.

If I walk away this minute I still make out like a bandit, once I figure out how to avoid banruptcy for at least six months. No easy take.....

[DesertEyes]

Heya Greenbug,

Originally Posted by Greenbug

... Here is my dilemma ...

Can't give you any advice, but here's some things I've learned from the biz side of life.

- I don't mix business with program, friends or hostage rescue operations. In your case I would either buy the whole business and run it as a business or rescue the lady. But not both.

- Whenever I buy a business I do a full audit. Especially if there's money involved. Double especially if the guy is a known liar or thief. If you already know he's a liar, then you know the books are all wrong and there's a whole lot more debt hiding around somewhere.

- Keeping around anybody from the pre-purchase company has never worked for me. It creates resentments in a big way. If the guy is a problem when he _owned_ the place, whatever makes you think he's going to magically turn into an angel when he's no longer the boss? You can't cut him loose later, you have to cut him loose as part of the deal or he'll get a lawyer and sue you just for grins.

Originally Posted by Greenbug

... So do I take the money or the moral high ground? ...

I don't see how this deal will get you either one. From a biz point of view you're going to get a lot of headaches, hidden debt and a guy who's going to be nothing but trouble. Such as stealing all the client base away from ya. He's a liar, what's to keep him from lying to all the clients and taking their business.

From a rescue operation point of view the hostage lady doesn't need rescuing. She can get a loan from a bank against receivables and just buy out the liar. Or she could sell out her half to a competitor and walk away. Or she could hire a collections agency to go after the liar and wind up with the whole company for cheap. Or she could hire a lawyer and force the liar to assume all the debt and she gets to walk away.

She's got lots of options, none of which involve you. You can be _supportive_ of her efforts, find her a decent lawyer, buy her lunch, but playing the hero is only going to get you a medal.

I think you have other options besides the two you mentioned. Sometimes the best way to help is to just simply pass the ammo.

Whadya think?

Mike :-)

[Greenbug]

Thanks Mike, makes perfect sense. The problem with most of those options is the lady has no more money, I mean she has mortgaged the house twice so far to fund this thing. The company has been incorporated which makes it a seperate entity, cant just fold up and leave. BUT she has used her social to finance some things.

I am meeting with a another biz attorney to find out the logistics involved with taking over a corporation and my financial responcibility with past debt. I am thinking of taking it though. 58k of debt isnt that much considering, and the fact that I have been able to secure all the assets with NO MONEY I am past the point of no return, but I need to do something, positive.

One more thing, I forgot to mention the property it is on I can buy at half the market value which is a seperate deal with a developer here who actually owns it. I am actually thinking of selling my house.

Maybe I should just cut and run, and just keep what I have now. F it! This really is based on GREED, if I can help the lady thats a plus. I guess I am a con man also did I mention I have no experience in landscaping or a contrators license to sell landscaping.

Your reply does make it clear this guy needs to go. No question

The more I read my own reply I see this is base soley on greed, I need to find a way to get out of this mess and fast. Take what I have now and just walk away......

[Mongo]

Hi Greenbug

Not sure how it works where you are but here there's a law that when a corp changes hands and retains employees they are considered to be "grandfathered" and retain all their benefits, seniority, and rights. This means that terminating them after the takeover leaves you responsible for their severance pay, health benefits, or whatever depending on how long they worked for the original co. An oustanding debt of only 58 k may be only a small fraction of what you may be liable for. Getting legal advice may be worth the money.

Mongo

[best]

Originally Posted by Greenbug

So do I take the money or the moral high ground?

~GB

Depends on what you are calling the moral high ground.

As word gets out (and it will) that so and so is a pedi, you would be saying...what client base?, before long.
It is not your place to fix his messes. Bail him out so to help the lady? Why not just take the client base and write her a check on futures? What she gets she gets.

He is also a pathological liar which is hard to see threw sometimes.

So an asset? Nope.
Enable him...bail him out.
Take hold of the business and with what you may gain, you can make a choice to help out the lady. Business is business. If she is hurting and the loss will pull her under... you can make a choice there and help out if you so want. If your helping is just a matter of replacing a busines loss...well that is business.
If you feel that you should replace a business loss of another and they have not lost a house or other things that are needed... Well I could have done better in the market and the stocks I was forced to sell...I am about $10,000 short. I will send you my address and bank numbers *LOL*

[Greenbug]

Thanks Mongo and Best,

The corporation is not a publicly traded corp. Its a closed corporation, with only the corporate officers (2). I would not be bringing the employees' over directly, only the lady. The labor was a "per job basis" I have no idea why they incorporated but I think it was to protect there personal interests as far as credit and personal assets. Now that things are going south quickly you can just go under without the state coming in and literally taking over everything (State wants there taxes)

The lady is just naive, I would be buying her out but not covering her losses entirely I would probably hire her to cashier the retail side of the business but thats it. Once all of this takes place, its business as usual.

Thanks for the replies,

~GB

[tramp]

good point best. buying blue sky is always an iffie proposition.