What to do if my son and daughter-in -aw have a business and she has embezzled funds, etc?

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What to do if my son and daughter-in -aw have a business and she has embezzled funds, etc?

It was an LLC but she changed it to a corporation with her as sole owner; he signed nothing. She took his name off as a signer on the business bank account; he signed nothing. She has been embezzling money from the business, writing checks for personal items and services, and now she thinks she owns all and has filed for divorce. She paid her divorce lawyer with a business check. Does that make my son his client also, since half of the money was his. Can these things be done without his signature? They were both owners of the original LLC.

Asked on July 18, 2013 under Business Law, Michigan

Answers:

Jeffery D. Maynard / Maynard Law Associates, PLLC

Answered 8 years ago | Contributor

Your daughter-in-law has likely not only committed a crime, but certainly your son needs representation in the divorce proceeding to enforce his rights to the current and missing business property.  If he has not yet sought counsel, this should be the first order of business.  In the course of the divorce proceedings, her actions can be investigated and the Court would have jurisdiction to order her to account for all of the funds, as well as potentially to make awards with respect to the business in your son's favor.  Ultimately, if the marriage is ending, the business is a marital asset subject to division.


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