I saw him from a distance at the hotel bar with a fallen face, and immediately understood that something had happened. We had known each other superficially for several years, and I remembered the man as always smiling and welcoming.
I went over to say hello and offer him company. At first he was closed and distant, but after two local beers he began pouring out his heart.
Listen, the story is this: I transferred money to an acquaintance so that he would buy land for me at an attractive price in a central location. I was responsible for raising the money, and his role was to manage the land for the group, prepare development plans, arrange to lease it to a local farmer and handle all the management, and in return he would receive a percentage of the expected profit from the sale of the land.
We didn't draw up a proper agreement between us - the man is family. I trusted him and he let me down.
In the first year all the profits were swallowed up by expenses, and so in the second and third years. The numbers made sense to me, since I understood there are costs of preparing plans, fees for consultants and so on. When demands for payment began to arrive in the fifth year I started to suspect that something wasn't right, but the amount was small, and each time I visited here I was shown supposed progress...
“So... and...?” I asked.
“Today it became clear to me that it was all one big fraud,” he said. “True, he bought the land, but it turns out he registered it in the name of a company in which he holds 90% of the shares through another company of his. I also found out that he leases the land to the company he owns, paying our joint company a paltry sum, while his company leases the land to the farmer at 5 times the price.
I don't know what to do.
Understand, I took money from friends, family and neighbors back home for this investment, and it seems to me that I have nothing.”
I asked him to calm down, asked to receive the paperwork, and to review all the paperwork from the legal side together with my partner in the country.
The next morning we met with the local lawyer partner. We sketched out on the whiteboard all the information the client had gathered and began collecting details discreetly.
After about a month we submitted a request for information to the “partner.” Within a few days we received a reply from a lawyer, an Israeli colleague, operating in the same country in cooperation with another local law firm. The reply rejected our demand on the claim that our client was not entitled to any information since he was only a 10% partner in the company.
The legal proceeding lasted more than 5 years and cost our client a considerable sum. The proceeding had its ups and downs. Interim proceedings, in which each losing side appealed to a higher court. Attempts at negotiation. A great many hours of work.
Just yesterday we received the final decision granting our client the rights due to him in the company that owns the land, only that over the years we discovered that the “partner” had emptied his bank accounts and had also left the country, so that for all the sums our client lost over the years, and it seems also for the legal costs awarded in his favor, it appears he will have no one to collect from and no way to do so.
Stories are based on real situations, with identifying details changed. Not legal advice.
Translated from the Hebrew original. עברית