Are you involved in an investor dispute due to accounting issues in San Diego or anywhere in California?  Are you concerned about your money and getting to the bottom of what is really going on with your investment?  Resolving business litigation and disputes over accounting issues require extensive legal skill as well as forensic accounting.

Key Takeaways about an Investor Dispute Due to Accounting Issues in California:

• If it’s off by a penny, it’s off by a million.  If something in your instincts says there is something wrong, you are most probably right.
• Not all investors or shareholders have access to the books.  However, the experienced shareholder attorneys at the Watkins Firm can help you to get to the bottom of things and get the answers you need to protect your investment.
• These disputes are about money, and the actions of majority interests who may be acting in their own interests.

What is at the Core of the Issue(s) at Hand?

Disputes between the members of an LLC or investors and shareholders in a corporation over business accounting can lead to expensive and time consuming business litigation.  The challenge with disputes between business investors and partners is that they often devolve into petty issues and aggressive tactics that may not be legally associated with the accounting issues at hand.  In these cases it is important to focus on the core issue.  What actions or behaviors have raised suspicion about accounting procedures?  What specific concerns do you have about the accounting process within the business itself, or the distribution of profits?

After more than 40 years of experience in these cases I can tell you several things:

• If it’s off by a penny, it’s off by a million.  If something in your instincts says there is something wrong, you are most probably right, and we can help you to get to the answers you need.  Take action before its too late.
• Forensic accounting can do a ‘spot check audit.’ This will tell us what we need to know, or if majority interests are preparing to do something that is not in your or the company’s best interests.
• These cases are about money. You’ve made an investment in a company and you need to protect that investment and the rights associated with it.  People don’t take actions in the “dark” (in an attempt to hide what they’re up to or doing) unless there is a lot to gain.  We’ve seen it all, including a group who told investors and some of their own friends the company was a failure, only to take all the IP and even the name, open a company offshore and make literally millions.  We protected our client in that case, and we can protect you in yours.

The corporate documents including the operating agreement or the shareholders agreement (which ever is applicable) should establish several critical facts:

• Who has access to business accounting information?
• Who is responsible for maintaining accounting records for the LLC or corporation?
• What access to the books is provided for by agreement?

Access to Records in an Investor Dispute Due To Accounting Issues in San Diego or Anywhere in California

Access to accounting records for the business is a central issue in these disputes, and this is the first step in any legal process.  The system(s) of accounting within the business and the accuracy of those books is a separate legal issue.  These two pillars are important components of what may be your greatest concern: “How are the distributions being calculated, and where is our money going?”

The Watkins Firm has more than four decades of experience and will work to resolve your investor dispute over accounting issues here in San Diego, or anywhere in California.  These cases involve complex legal and financial issues.  Money is on the line.  You need access to important information and to get to the bottom of what is happening with the company and your investment.

Pro-Tip: “we’ve, we’ve had so many shareholder fights where,  a company group of friends or a group of friends who know friends, maybe 30 people invest in a company and it’ll be doing well, but not great. And the investors, the shareholders won’t be receiving disclosures, or they will be receiving them, but they sort of don’t add up. And then they do an investigation and they come to an experienced law firm like ours and they say, ‘well, let’s, let’s get in there seeing the books and records,’ and you get some pushback from the company. And that’s when all the hairs in your neck stand up and you come to the Watkins firm and we file a motion. And we discover through our due diligence that the company’s doing very well, and that they also formed an offshore corporation of the same name. And they’ve taken all the assets and they’re all driving Rolls-Royces. So this has happened more times than I can say, because it just does happen. Nobody fights over anything unless there’s money involved. If it’s just doing okay, they would tell the truth and say, it’s all great. But if that big money offer comes in the door and they have a way of keeping it for themselves, it’s very tempting for human nature to turn that down.

We’re talking about breach of the shareholder agreement and most importantly, lack of access.  What can we do as an attorney to help protect our clients contract in their shareholders agreement and their access to information? Well, we like to say, if it’s off a penny, it’s off a million. So we look at the financial disclosures you’ve given, and if they don’t add up or doesn’t seem straightforward, we suggest you demand for documentation. And if they don’t give it, that’s sort of like them pleading the fifth, you know, something’s wrong when they’re not willing to give their investors, their owners full access, full transparency into what’s going on with the company.

So that sense that you have that something’s just not right. That should also be a sense that maybe I should get some help.  And you should do it right away. because, when shareholder fraud or a shareholder breach happens, it’s almost always for a purpose. There is an immediate opportunity for management, and its usually about to go down, and it’s probably going to involve a lot of money. They usually won’t do it unless it’s worth something.

This is about money and timing . If let’s say you don’t have a shareholder agreement, or you have a weak shareholder agreement and management has broad discretion to do a lot of things, and they’re getting ready to do some questionable things, to make a big profit. And you come along and say, wait a minute, I think something’s wrong here. And you pose an objection. Well, before you file a lawsuit, this opportunity that management has is still there. So if you are the squeaky wheel right away, before they go forward with whatever they’re doing, then you may profit from that. But if you’re not, then it’ll just happen. And instead of sharing in the profits, you’ll be fighting to claim you had rights to get some money back.” – Dan Watkins, Founding Partner

If you are a business owner, member, investor or shareholder and are concerned about misappropriation of funds or assets, accounting or distributions within your company or an investment we invite you to review our podcast Episode 14 – Shareholders Rights and Disputes as well as the strong recommendations of our clients and contact the Watkins Firm or call 858-535-1511 for a complimentary consultation today.  We have decades of experience resolving San Diego business litigation and disputes over accounting issues and fiduciary duties.  We take a unique approach to these disputes to ensure the most timely and cost-effective resolution of your monetary and business concerns.

Meet Daniel Watkins:

Daniel W. Watkins is a true people person who sincerely listens. He cares deeply about what others are going through.  Dan enjoys digging into the facts and finding creative solutions to problems.  He contributes his insights candidly and constructively.

Dan’s interest in people make him deeply invested in every relationship and his exuberant personality makes him a true litigator. Dan fights for his clients with a fierce and calculated commitment.

Dan has practiced in the areas of business, medical practices and healthcare business, high tech/science, real estate and employment defense law since 1987. He is a trusted litigation strategist and true trial attorney with over 50 jury and bench trials to his credit. Dan has successfully represented both large companies and individuals and achieved substantial victories in well-publicized trials throughout California and the U.S.

He is experienced in business and corporate formation and administration, as well as all forms of alternative dispute resolution, including binding arbitration and mediation.

THE ROAD TO BECOMING A BUSINESS LAWYER AND LITIGATOR

Dan has almost 40 years of experience working with, for and against some of the largest insurance companies in the country. He has successfully tried and litigated cases in the areas of Healthcare Compliance, Commercial Litigation, Unfair Business Practices, Fraud, Breach of Contract, Battery, Premises Liability, Product Defect, Medical Malpractice, Discrimination, Sexual Harassment, Construction Defect, as well as Unfair Competition, Defamation, and Trade Secrets.

In December 2003, Dan commenced litigation against Health South Surgery Centers-West, Inc and its’ subsidiaries, exposing the company’s extensive mismanagement and misconduct of its’ surgery centers. Dan has also been asked by some of California’s largest municipalities and corporations to conduct legally required investigations into matters involving alleged employment discrimination and harassment.