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Using (damaging) information as leverage

Starting and Operating a Business - forum.freeadvice.com
What is the name of your state (only U.S. law)? NY

I have a dispute with a (retail) business, over work I performed for them to the amount of 10k over 4 years. There was no formal contract, but the work was well defined in an email, asking me if I would be able to do it or will they need to look for somebody else, as well as that it will be paid work. They were quite happy with the work and did reiterated that they will pay me when I send them invoice (which I didn't do for a long time.)

We also agreed to enter into a separate partnership on a different (publishing) business where I am a minority share and the retail business is the majority, so every corporate decision is made by it regardless of my vote.

They made the partnership conditional on me completing the work before forming our joint S-corp LLC (incorporated in OH where the retail business is incorporated).

Four years later they are refusing to pay me for the work I did for the retail business, claiming that they have 'gifted' me my share in the joint partnership with the business partially in lieu of compensation. This is not stated in the operating agreement of the joint business we share, and there is no record anywhere that such exchange could even happen.

This may be getting too specific and I am most likely going to have to consult an attorney at some point, but I don't think I am there yet and I would still like to try and resolve this by mutual agreement.

I have information which if I make public will inflict, I believe, substantial damage to the business:

(1) I control the data (website) of the joint publishing business. If I shut it down or destroy it will stop driving sales to the retail business which is substantial. The operating agreement for the business doesn't specify the nature of the business or lists any assets, only the initial contribution o $500. When we formed the partnership the website was already existing, they had me take control from the previous person and then had a dispute with him over ownership which ended with a settlement.

(2) I have emails and recorded phone calls which I believe show them to be dishonest, which I believe will severely damage their retail business, as their image is very important to it.

(3) From the contested work I have a copy of the retail business proprietary information (customer and order data) until Sept. 2016. There was never any formal or informal nondisclosure agreement. I believe that it is valuable to their competitors and even if I cannot just sell it, can I offer 'consulting' services with their competitors where I offer advise based on my analysis?

(4) I can make public my current dispute, and how I believe they are trying to cheat me. I would think that at least this part is in the clear. It will also illuminate how exactly the retail business controls completely the publishing business, which they prefer to keep obscured.

I have less than minimum resources, but I know that they are afraid of being in the spotlight because it is bad for their business.

Again, if it is too detailed and specific, I would be happy to generalize and rephrase, but I am wondering what the general legal implications may be for using various leverage options I have available. Implying that I may have to use some of them may provide them the needed incentive to keep talking with me and try to figure out a solution.
Date: Jan 11, 2017   


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