My US investment has turned bad, can someone help to look into it briefly

January 13, 2021

by a searcher from Estonian Business School in Tallinn, Estonia

I made an investment into a Nevada registered company, which acquired a web property in###-###-#### The acquisition did not go too well but there is positive cash flow coming from the portal, but I have been kept in the dark, have not received any annual reports, dividends etc. Additionally company manager has turned my shares into another company shares (despite I did not give my consent to enter into a new much riskier plan) and has pursued another strategy and the situation is a mess.

I am EU citizen and don’t know the US corporate law and was wondering if anyone could help quickly look through my situation and perhaps there are clear things i could/should do?

Also, is there a company registry where I could purchase annual reports for the companies, to see whats going on? I am from Estonia, European Union and can purchase any company annual report for 2€ per piece.

Reply by a searcher
from American University in Fairfax, VA, USA

What was your investment size? You will have to get an attorney and spend more money. At this point, you need to ask if it worth pursing the company manager?

Also depends on what type of agreement you have with the company manager. You really need to consult with attorneys. Often times it is easier and better to write-off the loss then to try to pursue it.

You can sue the company manager for fraud and other stuff in civil court but you will have to be certain that there is fund through which you can get paid (if you win). If you lose, now you have to pay for their legal costs.

I'm assuming you invested in a holding company which was a LLC. Did you see the company formation document? Are you a listed owner in the company formation document? The thing with Nevada is that it has fairly strong anonymity factor. So it might be hard to figure out the real owners of the company, what is being transacted through that company? It is possible that the holding llc has not received anything back from the operating company because the company manager is robbing the piggy bank.

I do not know your full situation so I am making guesses/

Lastly, since you are in EU you will have to make frequent trips to US if you are pursuing the legal route. This means additional costs plus probably loss of revenue and focus in whatever activity you are doing. However, if you are the go-getter attitude and have a management team in place who can run your business in your absence then go for it.

Lastly, I would look towards filing complaints through SEC, Nevada state and etc and have the govt chase them. Govt has unlimited resources to go after the bad apples.

Reply by an investor
from Columbia University in Whitehouse Station, Readington Township, NJ, USA

Sounds like you should get a US attorney and discuss your legal options. As an investor, you have the right to be apprised of the company's finances and of any M&A activity that would affect your investment. I sense that your business partners are trying to take advantage of the fact that you are not a US citizen and may not be familiar with our laws. Good luck

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