To stick to terms of agreement with friends

[Bungybungy]

Burner account. I’ve been friends with F for decades. She had a large social media presence. I’ve worked hard to establish my business and have been successful. I’m proud of what I’ve achieved. 5 years ago, F came to me with a business idea, wanting to set up herself. She didn’t at that time have the funds to set up by herself so I agreed to invest a not insignificant sum in return for 20% of the business. She was happy with that deal, and because I work in legal services, I got our guy who deals with contracts to draw up an agreement specifying what rights and responsibilities etc. Although this was an area she had worked in before, she had never actually run a business before. I guess that’s why she came to me in part, so it wasn’t just about the money. To her credit, and using my advice, the business has grown quickly and is well known. At the time of the investment I understood that I could just as easily have lost my money completely.

Our relationship is now very difficult as I’ve realised over the last 2 years that she’s been distancing herself from me, which is fine, relationships come and go, but last week I got a letter from her solicitor telling me that she was unhappy with my ownership and that she wanted to buy me out for just over my initial investment. Given the business is now worth several times over my initial investment, I can’t accept that (she put close to no money in herself). For her to pay me off would cost her 5 times my initial investment. AIBU to expect her to honour the agreement? I know she’s contractually bound but she’s been so vile about this, I’m second guessing myself. She keeps threatening to “out” my business via her social media(I have no idea what this means). I’m actually scared about what she could do.

I think

It is to my great shock and disappointment that I find that despite the clear nature of the investment and contract that she regards the money as a GIFT not an investment and plans to return only what I put in.

should read:

It is to my great shock and disappointment that I find that despite the clear nature of the investment and contract that she regards the money as a LOAN not an investment and plans to return only what I put in.

A gift isn't returned. A loan accrues interest. An investment in your case is a proportion of the business

Oooo what a sour puss ! No doubt she’ll go deep into victim mentality.

well done OP.

if she is getting bought then Don’t they have to check all claims on the business first and usually offer a three year agreement ?

Has she missed the point that if your 20% share of the business has increased 5 times in value, then so has her 80%? Sounds like you're both quids in and she should be celebrating, not whinging.

It never ceases to amaze me what people will do for money. And it's always the worst types who go on about "the principle of it" while trying to slither out of their obligations.

Make sure you remain polite the whole way through, and wish her the best with her endeavour. There's no need to be stingy with good wishes, there's plenty to go around (plus she won't ever be able to point the finger).

It’s not as though the OP lent £10 and now wants £50 back. She purchased (let’s say) 20% of the business for £10. The business is
now worth 5 times more so her 20% share is worth 5 times more (£10 x 5)

There’s only one person being a dick here and it isn’t the OP. It’s her cheeky ‘mate’ who’s refusing to give the OP what her share is worth.

You would think so. It doesn’t seem enough for her to keep the business growing and share in it. She has made me the villain here and I can’t do anything to fix that. It’s with my solicitor now.

Solution: Decide on what is most essential for You at this current time and select that option.

Lots of posts focusing, rightly, on the values angle but how about the life’s short and processing this (or even engaging her) is a waste of your time. If you need the cash then defo but otherwise refer her to a third party to do the contact work and save all the hassle that she is weaponising.

• If she’s feeling over confident then passing her onto someone else will show her that you’ve got better things to be doing and none of them are related to her or her business. It becomes transactional then not emotional between parties. Win for you.

• The other option is to quickly read Chris Voss’ book ‘Never Split The Difference’ (gold dust for negotiations of all types). Run the ‘How am I supposed to do that?’ Which pushes everything back to her as she’s the one with the discounting plan in mind.

She’ll be well aware of what pressures she can or cannot bring to bear but this will cost her time and focus and heaps of energy plus likely lead to mistakes.
Likewise defending against her will do the same for you. It’s a race to the bottom.

You have a legally enforceable contract. Stick to it. It’s what she agreed.

Get your solicitor to write back stating that a) you would also like to discuss compensation for her threats to ‘out your business’ and b) if she carries out her threats you will also sue for defamation.

Wow you put most of the money in and only got 20% and now the cheeky c**t is trying to stiff you for your rightful growth.

Why didn't you go for more than 20% originally?

Absolutely horrendous behaviour on her part. Typical of a social media influencer.

I thought the same, but sadly when greed creeps in some want it ALL

It irritated me that the ex-friend apparently "gets a lot for free" so expected this too, because that was never the arrangement in the first place, but anyway you're doing the right thing leaving it with the solicitors OP, and I hope this gets resolved without too much damage

Thank you for this. I’m usually very much life’s too short) but I understand that there is a balance to be struck here. We aren’t friends now although I feel this will hit my daughter quite hard and I actively dislike her for that, but I’m not going to let that control what I do. I’ll let the lawyers sort it out.

Nice. I’m surprised at her naivety. She cannot imagine that you would expect her to simply accept the return of the original investment? That’s just foolish. You’ve supported her financially therefore she needs to buy you out with a revalued amount, should you wish to be bought out, the business sounds pretty profitable.

I don’t think it’s naivety. I’d say greed. She wants it all. Were it not for your seed capital she’d likely have nothing. I wouldn’t accept a penny less than what I’m due if you can possibly help it.

Jeez, that was quick! Doesn't look good on them.

It just goes to prove that the love of money is the root of evil. Even if she genuinely thinks you’re in the wrong she shouldn’t be involving the children in it.

She can’t surely just think you’re asking for something you’re not entitled to? If she agreed to something she didn’t understand or she didn’t take an option that in hindsight would’ve been better for her, then that’s a shame, but she made her choice and now she has to live with it.

So pleased she's getting the letter today to stew over the weekend !

This 'friend' appears to be blackmailing you, very unethical and unfair. Stick to your guns for what is legally yours. You were honourable enough to take the risk of giving her the money to enable her to start the business. Completely naïve of her to think that she doesn't have to give you 20% of profits now.
This is rightfully yours

Stick to your guns, unbelievable to involve your children. Fuck that shit. I’d now refuse to sell and keep raking in the yearly dividends as company director.

Threatening your reputation if you don't give her what she wants? Isn't that a criminal offence?

So sad to be so money-mad. She must have lost it when she got the solicitor's letter.
But she can decide to not distribute dividends, so OP is better out.

Business aside, which you are totally in the right about, you were a good friend who helped her when she needed it. She has thrown that back in your face. She doesn't sound like a very nice person at all, very entitled judging by your updates. Stick to your guns and wash your hands of her once you get your money.
If she tries to "out" you she has no valid reason, and we know how fickle social media is, if people find out the truth she'll be out of favour and deemed untrustworthy.

@Bungybungy Without you there would be no business to begin with

stick to your guns!! without you she would have nothing!!!

shes a nasty bitch involving your daughters!!

I feel like she doesn't understand what an investment is...it wasn't an interest free loan.

Well done you on a good investment 👍