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Background info:
I had a creative idea to start an online business 3 years ago. I
informed a close friend about my idea and he (who has his own business
LLC at the time) suggested to start up the business quicker he provided
me his source code with no contract just a verbal agreement for profit
sharing after some specified gross percentage.
I worked for 9 mths researching and developing the idea alone and even
provided some of the code to my friend. I then registered my company
as an LLC in Delaware, and spent the past 2 years (2003,2004)
establishing my business online. The business is finally profitable
and at the verge of becoming a huge online site.
Recently, the past 6 mths, my friend who provided me the source code
back in 2002 now wants to change the original verbal agreement of
profit sharing to a "Non Exclusive License" contract that provides me
with little control over my company and what I want to do with the
online business.
I rejected numerous contracts sent to me. Because of the harassment of
his lawyer, I ended up getting a lawyer to represent my case. My
lawyer and I have sent them numerous contracts about settling on a
reasonable contract that would allow me control and ownership but
ensure the client that they will receive the agreed profit sharing.
They kept on modifying the contract to remove control and ownership of
my business. My lawyer ended up drafting a proposal together informing
them that we would be willing to sell the business to them for a
reasonable asking price or choose to remove the Intellectual Property
from the site.
They have rejected my offer including another offer split in half of
the original asking price. My lawyer and I have agreed to pursue the
removal of the Intellectual Property but now the clients want me to
either buy me out for 100K or force it to court.
The business is worth way more the 100K and is projected to make
millions in the future.
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Questions:
What legal advise can any of you provide me? If I'm forced to go to
court, that could potentially run my business into bankrupcy with all
the legal fees.
What protection do I have against huge legal fees being an LLC?
Is there any legal protection against a small business being extorted
into selling it to a larger corporation?
My lawyer wants me to settle with the 100K but I feel I'm entitled to
way more than that. We have tried to negotiate the deal but each time
they keep on changing the price and terms to be unreasonable. What
would you do in this situation?
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