If 2 people enter into business and1 of them forms another business using contacts from original the business, what can be done?

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If 2 people enter into business and1 of them forms another business using contacts from original the business, what can be done?

The original commodities business have been abandoned by my partner. We have a company name and it’s registered in NY state. I am entitled to 49%. Mr X formed the same company with contacts from original business abandoning ours; no explanation or meeting. I am president and treasure; partner is vice president. It has been a little over a year and there is a big deal closing. I don’t know how much is coming in but I do know that it’s a large (every month anywhere from 6 months to 2 years). He wants to give me $5000 a month but he doesn’t want to say what is coming in. What can I do?

Asked on May 26, 2011 under Business Law, New York

Answers:

S.L,. Member, California Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

If the business agreement with your partner included a noncompetitive provision, you could sue for breach of contract based on violation of the noncompetitive provision.  Your lawsuit for breach of contract could also include separate causes of action (claims) for interference with prospective advantage (unfair competition) and if specific identifiable customers have been lost, you could include causes of action for inducing breach of contract and interference with contract.

You could demand an accounting to ascertain the monthly income.


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