Business transactions are complex, and the steps that go into a business formation are no different. Details of ownership and shares are of utmost importance to address and record thoroughly.
The owners of Crystex Composites LLC in New Jersey have lived and learned this business lesson after court proceedings regarding ownership of the glass and ceramic electronic parts manufacturer ended on May 6, 2010.
It was not Crystex’s first time defending the ownership of the business against claims from their former business “partner” John Murray. A New Jersey court made a summary judgment in 2007 saying that Murray shared no ownership in Crystex after having failed to live up to his financial obligations to the company.
While Murray’s lack of financial contribution to Crystex voids any ownership claims that he fought for, he can be credited with the initial formation of the business. As a CPA in 2001, Murray worked with Spaulding’s Mykroy/Mycalax Division (M&M) in their filing for bankruptcy. Murray believed there was value in the company and decided it would be a good idea to become joint owner of the business with owner at that time, Flores.
Eventually, an agreement regarding the business formation was settled, and that contract included various investors who would share equity in the newly formed Crystex Composites LLC.
Murray’s financial contribution to the business was agreed to be $200,000, but he never paid as promised. He had that much money in the stock market but allegedly refused to take it out since he believed his stocks would go up and he did not want to miss out on potential profits.
When Flores noticed certain questionable business practices and behaviors from Murray, that worry–along with Murray’s lack of payment towards the business–prompted Flores and the other shareholders to take their case to court. The court decided against Murray and decided that his lack of payment to the company means he can claim no ownership in the business.
Murray appealed the judgment shortly after that decision, and the court agreed that Murray shared no ownership in Crystex.
In May 2008, Murray challenged a New Jersey court further by requesting they make a declaratory judgment regarding his involvement with Crystex. According to FindLaw, a declaratory judgment differs from other judicial rulings in that it does not require that any action be taken. Instead, the judge, after analyzing the controversy, simply issues an opinion declaring the rights of each of the parties involved.
The court saw no new evidence to consider regarding the case and in a summary judgment filed earlier this month, agreed with the previous court decisions. Murray owns none of Crystex Composites LLC.
Murray v. Crystex Composites LLC