My question involves business law in the state of: Minnesota. I manage a small business incorporated as an LLC in MN, but with offices in CT. There are two members a majority and a I the minority shareholder. The operating agreement states that major decisions have to be unanimous, and that in case of disagreement there will be mediation first and arbitration after. Because of losses and poor performance, the majority shareholder wanted to dissolve the company, and I opposed the decision.
The majority shareholder then filed an arbitration claim with the American Arbitration Association; the claim stated "the closing of the company" and requested the payment of a certain amount. The AAA lawyer then steered us toward mediation, and proposed a neutral with experience in business. We met with the neutral, reached a tentative deal, then haggled back and forth a number of details and reached an agreement in principle to settle the business: I would receive a certain amount, some inventory, and exclusivity with some customers for a limited period of time, in exchange for my surrendering my share of the company. I signed the last page of the settlement and e-mailed it to the other party, asking for the same before we exchanged signed originals. However, my counterpart has waited for a couple of weeks, and now is telling me that he cannot go through, because the person he thought would invest in the company has got cold feet.
This was a total surprise, and now I'm left with having spent 15% of my annual income in mediation fees and legal counsels to review the settlement agreement. Do I have any recourse I could make in the future? Isn't the lack of disclosure of an outside investor, since it was an important element for the outcome, something that implies the other party was dealing in bad faith? Is there any other legal angle I could pursue or look into?
The majority shareholder then filed an arbitration claim with the American Arbitration Association; the claim stated "the closing of the company" and requested the payment of a certain amount. The AAA lawyer then steered us toward mediation, and proposed a neutral with experience in business. We met with the neutral, reached a tentative deal, then haggled back and forth a number of details and reached an agreement in principle to settle the business: I would receive a certain amount, some inventory, and exclusivity with some customers for a limited period of time, in exchange for my surrendering my share of the company. I signed the last page of the settlement and e-mailed it to the other party, asking for the same before we exchanged signed originals. However, my counterpart has waited for a couple of weeks, and now is telling me that he cannot go through, because the person he thought would invest in the company has got cold feet.
This was a total surprise, and now I'm left with having spent 15% of my annual income in mediation fees and legal counsels to review the settlement agreement. Do I have any recourse I could make in the future? Isn't the lack of disclosure of an outside investor, since it was an important element for the outcome, something that implies the other party was dealing in bad faith? Is there any other legal angle I could pursue or look into?
Business Disputes: Arbitration, Mediation then Stop
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