One of our investors is threatening a lawsuit unless he gets his money back. Should I give him what he’s asking for or take the lawsuit?

In business, one of the most valuable relationships you will have is between yourself and the investors. Ideally, you would have already established agreements and contracts that outlined specifically the various expectations of your business and the role of the investor. If you have that documentation, you should rely on it to help you navigate this problem. However, if there isn’t anything in writing you really have two choices: negotiation or litigation.

It’s important for you to understand specifically why your investor is wanting to back out and if there is a way for the two of you to come to any sort of amicable terms. As far as the promissory note, it can be a damage piece of evidence against you if you don’t repay it and this situation ends up in court.

A possible solution would be to draft an agreement between you and the investor and establish something that could work out for the both of you. It depends on your current relationship on what those types of terms would be. A business attorney can certainly help you with this.

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