Help!
4 Years ago I started a dance retail business with a nut! She was not honest about her intentions for starting a business with me. She is independently wealthy. I brought the concept, background as a dancer, retail management experience and reputation. Against my better judgement and pleas, she insisted on using her personal money to fund the business. Her bookkeeping skills were such that she's overpay bills before they were due, create a huge deficit, and then when I was off, she'd deposit huge chunks, thousands of dollars to cover the deficit. She never put a loan agreement or promissory note in place. Although I have brought the store to a stunning reputation and continual growth, we are still showing a loss at the end of our 2nd year,but experiencing 67% increase in sales. HOWEVER, my partner has created a $400,000 debt to herself (no loan agreement) and now wants out. We are 50/50. She wants me to buy her out and simply sign note (after the fact) for all of her money payable for the next 20 years to her. The store is only worth $200,000 in its 2nd year. We have no buy/sell agreement. I know, I know....So what is the formula to buy her out? I won't take on a crushing debt. Other than that, there is absolutely NO reason to dissolve a thriving popular new business as it stands.
M Crosson