Any "pro-active" lawyers with experience in business partnerships?

Legal General Legal Matters
1

So business fell apart at the hands of a local partner and I need legal help from a lawyer that is either: more aggressive than locals, pro-bono or cheap, willing to fight for a case even though the return may be less than 500K
Let me fill in some info:
Basically, our restaurant had two partners, with me holding 65% ownership as defined by a signed partnership contract (Chinese+English)

However, the business license was a sole proprietorship in partner’s name. The lease was signed in my name, and bank account in partners name.
Basically my partner went rogue in the last year of operations and starting declaring that she didnt need to heed the partnership contract and that the business and assets we’re hers outright. She fired the accountant, handled everything in cash (no records) got rid of all employees whilst tripling her own salary which put us in the red every month, and when the debts incurred we’re too high, she sent a text message saying she was closing shop in two days. Paid off the debts with the rental deposit (circumvented me, as I was the one who signed lease) gave all the in store equipment and assets to the landlord for free, and dropped off 4 plastic bags of receipts with a note saying “the company has no more money”

Now we have her on tape saying that she was the sole owner and she doesn’t need to answer to anything. Also, I have disgruntled employees who are willing to make statements against her. As well as actions such as changing trademark to her personal name, skipping over me (the signee) to get rental deposit, etc. However, my local lawyer thinks it would be a waste of time to go after her. Now of course being an American a lot of this has to do with sheer principle, but my original investment into the company was over 700K. Also the brand was well recognized and generating profits before she drove it into the ground to fill her pockets.

Is there anyone out there that knows a lawyer that can help out with this case? Or am I really stuck in the local legal limbo state of taking a loss because it’s “too ma fan” ?

Sorry for the rant. Thanks for your help and advice in advance

2

If the amount in dispute is only NT$500K you are probably at the bottom end of an amount that is worth litigating. A decent Taiwanese lawyer will charge you a fee of around NT$100,000 to sue your ex-partner. The handful of ‘foreign’ firms in Taiwan charge substantially more and don’t necessarily do a better job. A Taiwanese lawyer working for one of them would have to handle the case.

If you win, the defendant will almost certainly appeal. Your lawyer would charge you another NT$100k

In Taiwan, you have to pay court costs up front although you do get them back. That would be around $7,500.

In order to secure your judgment of $500k, you will need to find and attach her assets. It would probably cost NT$10-15k to attach her assets (assuming that she has been foolish enough to have left any in her name which is unlikely). Then you would need to place a bond of NT$167,000 to attach the assets so that she doesn’t transfer them to avoid her judgment. This is essential because otherwise she will do this.

Your local lawyer was right. Your case doesn’t make much economic sense. You should have consulte with a lawyer before you set up the partnership so that you could have at least have tried to secure your investment and avoid this situation (a secured note, arbitration, control of the company seals etc). The fee for doing that might have been as low as NT$20,000.

No lawyer is going to take commercial dispute like this on pro bono. Foreign lawyers are more expensive than Taiwanese lawyer, and besides, only a Taiwan lawyer can advise you and go to court on a purely local issue like this one. So you would be paying for two lawyers not one if you deal with a foreign lawyer.

So what can you do? First, you might ask your Taiwanese lawyer to advise you on whether there are grounds for a criminal complaint. That’s what a lot of Taiwanese do. If there is, you might be able to extract a settlement from her once the prosecutors are after her for fraud or criminal breach of trust. And your principles just might be vindicated.

If your Chinese is good and you have some educated Taiwanese friends, you may be able to figure out how to represent yourself in your civil claim. One good thing about Taiwan’s courts is that they are set up so that litigants can represent themselves and they will give you some help in doing this. Your lawyer might be willing to help you draft the initial complaint for around NT$20,000 or so. But remember, you can’t get water from a stone, so if she doesn’t have any assets or she transfers them, you will be left with nothing unless you attach her assets. You are not going to be able to do this without help from a lawyer.

Good luck and check anything I have said with a Taiwanese lawyer before acting.

3

Thanks for the lengthy response feiren! Very informative and yes similar info to what we’ve heard before.

In response to some of the points though, yes we did have a lawyer and certified accountant working with us through the setup and process of the business. That’s why we had a English/Chinese partnership contract drafted and signed by all parties that listed bank accounts, lease, business license, etc. This is why lease, with attached rental deposit was signed by me, whilst business license was in partner’s. The substantial rental deposit (480K) acted as the secured note as I didn’t see any way that a party other than the name on the lease could cancel the contract, get the lease, and spend all the money without my consent. (lease signed with my personal name and chop, not business)

It was when she started feeling no need to heed to these documents that our lawyers drafted and she signed that we started having trouble. Accountant was fired without my knowing. Refusal to hand over seals as well as heed to lawyers, both ours and her own.

Our exact case was going to be a criminal case in the taking of rental deposit as well as changing trademark into her personal name after closing the business and using all money without consent.
However, even with this, the lawyer seemed to be very lackadaisical about pursuing it and has pretty much given up.

His fees originally were going to be only $50,000 to bring to the first level court. Of course if it went higher up, more fees would ensue, but I’ve never come across such a pessimistic lawyer in my life. Just couldn’t believe with this partner flat out boasting to people about what she was planning and doing, there is no case.

4

taipeigooch,

Feiren has provided very detailed and helpful information. Here are few approaches to keep your cost lower. But really don’t know the details of your case. These are just for your reference.

  1. For the criminal procedure, you can do it yourself. Just ask a friend help you draft the complaint in Chinese. During the prosecution or court hearing, you only need to provide evidence and relevant information, and the prosecutor or judge may help since you are the victim in this case.

  2. Criminal complaint + ancillary civil action= no court fee: You don’t need to pay court fee for criminal procedure. If the defendant is charged of a crime by the prosecutor, then the case will go to the court. At this time, you may attach a civil complaint to the criminal procedure to start a civil action.Then you don’t need to pay court fee for the civil litigation, which can save your money, too.

Article 487 of the Code of Criminal Procedure, “Those who injured by an offence may bring an ancillary civil action along with the criminal procedure, to request compensation from the defendant and those who may be liable under the Civil Code.”

3.However, if you have to file a civil lawsuit without a criminal procedure, you may keep the claim’s value below 500k(which is also the damage you mentioned above). Therefore, the case will be reviewed by the court through a summary proceeding, and appealing for the judgement in the second instance is restricted by certain conditions(see below) . So it means, under most of the circumstance, either you or your partner will have 1 opportunities to appeal. Therefore, you don’t need to worry about the cost will go crazy…

Article 427 of the Code of Civil Procedural , “A summary proceeding as provided in this Chapter shall apply to actions with regard to proprietary rights where the price or claim’s value of claim is not more than NTD 500,000.”

Article 436-2, “Where the value of the interests in an appeal from the decision made in the second instance under summary proceeding exceeds the amount provided in Article 466, the party may appeal forthwith to the Supreme Court but only on the ground that there is a manifest error in the application of law in the appealed decision…”

  1. The defendant might move her property away to prevent the execution of judgment. Attachment or injunction might be a good way to secure it. However, if you know she works in a company with decent salary or owns a house, the possibility of changing job or transferring her property to others might be small. Also, she still has to settle with you, if you receive a favorable judgment in the criminal procedure.

Last but not least, the above is for your reference. Everything should still depend on the details of your case.