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Business litigation claim accuses CEO of misusing startup funds

Starting a business in Georgia with another person or people is often an excellent strategy. Collaboration and the dispersal of potential risk can help a new business thrive. Unfortunately, when a disagreement arises between business partners, it can mean disaster. This could be the fate of one out-of-state startup after one partner accused the CEO of a health care app startup of misusing funds. The ensuing multiple business litigation cases could have a long-term, negative impact upon the company.

According to the original civil claim, a former partner at the startup alleges that its CEO used company assets to pay for personal expenses, including food delivery, alcohol and escort services. The former partner has since filed two lawsuits and his parents also filed a suit to stop the CEO from making contact with them, claiming he left them harassing voicemails. The two men were reportedly best friends before all of this occurred, but the former partner claims he was fired when he approached the CEO about how he was spending company money.

Representatives for the CEO have filed a motion in court seeking to block a deposal request as well as filing to dismiss the lawsuit filed by the former partner’s parents. His attorneys claim that the overall case has no merit. The civil suit claims that the CEO misused around $400,000 that was meant for the company.

Only time will tell what may happen to this particular business, but it brings to light an important fact. Anyone starting a business in Georgia may want to work with an attorney who has experience in handling business litigation. Litigation is sometimes necessary, but it needs to be handled by a competent professional who understands all of the potential impacts it may have on a company.