Husband is a 50% partner in a successful business operation. After a series of unfavorable orders, Husband appears to have "fled" the jurisdiction. As a result of his actions, he made no provision for the payment of his interim support obligation and has not made provision for production of discovery materials needed to prepare the matter for trial.
In fleeing the jurisdiction, the husband left a note for his business partner, which stated that he felt that he was on death's door because of his failing health and that he felt too ill and physically unstable to continue working. That note was provided by counsel along with a letter to the court, where the lawyer also relayed the business partner's observations of Husband's physical condition; which observations were consistent with the representations made by husband in his note.
As a result of Husband's actions, the court entered an order ( among many others) joining the business entity and the business partner for a variety of reasons, including enforcement of its orders for support,equitable distribution, and discovery.
Now.... the complicated part:
Under the terms of their shareholders agreement, if either partner is "disabled", the business entity is obligated to make specific payments on his behalf for a specific duration. The agreement defines "disability" simply as the inability to work for 2 or more weeks because of illness or injury. Husband has been gone for longer than 2 weeks and his note and the observations of his business partner suggest that he left because of health reasons.
our view is that wife has the right to rely on the terms of their shareholders agreement and have the money due husband as a result of his "disability" paid into an escrow account pending trial / husbands return.
The partner objects, suggesting that the court does not have the right to rely upon the husband's note nor the remarks attributed to him in counsels submission to the court for purposes of determining whether husband is actually ill, triggering the disability provisions of their shareholders agreement.
The partner next says that the court has no right to enforce any provision of their shareholders agreement nor does the court have the right to compel him or the business entity to pay any amount into escrow other than an amount of husbands share of the profits of the operation at years end.
While I would like to think that we have done our research on this issue properly, I would appreciate as many points of view on it to help us better prepare.
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Richard Diamond
Managing Partner
Diamond & Diamond P.A.
Millburn, New Jersey
973-379-9292
[email protected]------------------------------