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Invested into company - now they have turned rogue

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Arresto Menor

I am from Singapore and am seeking legal advice as to I have any recourse on my investment into a Philippines company, which have turned rogue.

- invested USD5K into a product for development by "PhilCo"
- product will be placed on Kickstarter and if project is successfully funded, principal will be returned along with 10% return (total USD5.5K)
- As the investor/backer, I will retain a 15% royalty on the profits (not revenue) of each product sale
- product was launched on Kickstarter twice, but was not successful because the company did not put in any effort to market the product
- now they are not replying my emails and are even RESELLING the rights to the product to other investors to raise more money (I found a proposal posted on a public area several months back soliciting for new investors without mentioning my ownership)

Key investment terms in the agreement:
1) Should, for any reason, the Product be aborted or remain sufficiently undeveloped to initiate a Kickstarter campaign after a period of 12 months starting from the agreed date of funds transfer, the Investor retains the right to withdraw and reclaim the Investment.
2) Investor recognizes that the his Investment is a form of speculative investment which involves substantial risk of loss of his entire investment, and that there can be no assurances that any tax benefits will result from this Investment.
3) Contract is governed by laws of Taguig City with jurisdiction exclusive to the State Courts located in the Philippines.

My questions:
a) Do I have a case to claw back my investment or at least, take over ownership of the product so that they cannot reuse it and market to other investors?
b) is their actions to resell a product that is partly my property fraudulent on their end?
c) If I have a case on this, is there any recommended lawyers who might be able to begin proceedings by issuing a formal lawyer letter to this company?

Appreciate any help you can share on this. Thanks!!!

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Reclusion Perpetua
1) Reclaim the investment from where? Are there any left if it has FAILED??
I mean if they don't manage to get new investors Smile

a) Well. From what you have written - if the time limit has passed, it seem you have a case to demand your investment back.
As I understand it you DON'T own whole, only 15 %. If so, they can get MORE INVESTORS and promise them a share, because there are 85 % more to get shares from...
b) Are they realy reselling WHOLE? Isn't it a part of the 85%?

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Arresto Menor
Hey Lunkan, thanks for the questions.

While the product had failed, the company had not. Therefore if the company generates profits, there should be money left to return.

There have been no disclosure on their part. It is also stated in the agreement that "no parties may reassign their respective rights and/or obligations within this Agreement without the other parties' written consent."

They were soliciting for investors around 4 months back (dated in the proposal), I have no idea if they have managed to find other fools (like me) as they have one day stopped replying my emails.

Any law firm recommendations? A small one to issue an initial letter or initiate preliminary arbitration proceedings will do, since the investment quantum is not enough (thankfully) to substantiate using a top firm. The best thing to happen is to settle out of court and claw back at least some of the principal.

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Reclusion Perpetua
I see. Has the max time for their work passed?
If so it seem you have the right to demand your money back.

What do you think yourself NOW - is it possible the product can success if they get money from other investors?
I don't know how long time after money can be demanded, but if you stay within that time limit, and believe it's possible it will succeed, then I would WAIT to demand any money until you know if 15 % is more or less than geting your money back... Very Happy

I don't know how hard it is in the Philippines, but in my home country I write such justice documents myself, both when it's only demanding of CLEAR demands and when it's some unclear court cases. I suppouse you have no problem to send a DEMAND yourself, starting with writing to the company.
I don't know if baranggay captains assist which such TYPE of cases. They do with many types and in many case types it's DEMANDED the case is handled by the BC before it can go to court.

If the company pay when you send the demand, then you don't need to make it a justice case... Smile
If they don't pay, the second step can be THREATEN with tell about them in social medias, which can SCARE AWAY other investors for them... Twisted Evil Smile

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