I invested in a company, that in the beginning, was doing well for just starting out. That is until the CEO became greedy and made changes and decisions to the detriment of the company. I resigned and the agreement (signed by all shareholders) was that I would be paid in 4 payments, quarterly for one year, begining June, 2010.
As of today, the company is still in business and has paid 8% of what they owe me, saying they don’t have the funds to pay me now. Before I sold my shares back to the company, at least I received a K-1 to file for NOL. We need the money, but am afraid if I sue, I will never receive what they owe me or any amount if it.
While I invested my savings, since I HAD great credit at the time, I also irresponsibly maxed out my lines of credit, which I have regretted ever since. After being scammed of $5,800 by a debt negotiation business, we contacted our creditors and have been working diligently to pay off our debts. Needless to say our credit hit rock bottom.
Since the company did not hold up their end of the agreement, do I still own shares in the company? Shouldn’t I still receive a K-1, so I can report a net operating loss when I file my taxes for 2011? Does it make a difference that the other shareholders are “working” partners?
Honestly, I have no clue. You’d really need to talk to your tax adviser and/or an attorney licensed in your state.
Please post your responses and follow-up messages to me on this in the comments section below.