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Dispute Between Co-Owners of Consignment Shop Ends Up in Civil and Criminal Courts

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Even among people who are generally cynical about capitalism, consignment shops are associated with innocence and good intentions. Their frequent customers are elegant grandmothers and frugal fashionistas. Consignment shops are where you go to get designer clothes without the commercialism. In a consignment shop, one would not expect to find the sort of ugliness normally associated with business disputes, the sabotage of property and leveling of accusations of crimes, but business disputes can happen to anyone. If you run a small business and your disagreements with your business partners are getting too complex or too emotionally fraught to solve among yourselves, contact a Maryland business law attorney.

How the Estranged Business Partner Stole Black Friday

In the beginning, Karma was everything you could want in an idyllic consignment shop. The shop opened in the summer of 2017, shortly after Yolanda Martinez and Theresa Blatchley formed the business entity Karma LLC. Martinez put up the capital to open the store and was to be responsible for paying overhead costs and taxes for the business, while Blatchley ran its daily operations. Martinez signed a five-year lease with the owner of a shopping center in Lutherville, and the store became a popular destination. The company frequently participated in charity events, and its holiday decorations were buzzworthy, further enhancing its reputation as a community staple.

Disagreements soon surfaced between Martinez and Blatchley; Martinez claimed that Blatchley failed to account for large sums of money that the store gained from its transactions. Meanwhile, Blatchley claimed that Martinez failed to pay the company’s taxes or even to register the business properly. Blatchley founded her own LLC, called Karma-Lutherville and started operating the store through the new company; she even set up a new website. Both websites claimed to represent the “real” Karma.

When Martinez discovered this, she decided to remove the store’s merchandise without Blatchley’s knowledge. Just before midnight on November 18, Martinez went to the store with her husband Ricardo and five other people. The store’s security footage shows them all dressed in ski masks and dark clothes, removing everything from the store, including merchandise, Christmas decorations, and cash registers.

Blatchley pressed criminal charges and a civil lawsuit. Some of the merchandise was on consignment, meaning that it belongs to its original owner, but when a customer buys it, some of the proceeds will go to the store and some to the original owner; at least one consignor also filed a civil lawsuit. A judge ordered Martinez to return the merchandise to the store, which she did. Both Martinez and Blatchley claim to have been acting in Karma’s best interests.

Let Us Help You Today

The partners in this business dispute seem to have consulted lawyers before things got truly bizarre. You should consult a lawyer, too, and your lawyer will most likely advise you to communicate in writing with your business partner, rather than to create a doppelganger business entity or to borrow a page from the Grinch’s playbook. Contact the Washington DC small business lawyers at Tobin, O’Connor & Ewing for help today.

Resource:

baltimoresun.com/maryland/baltimore-county/towson/ph-tt-karma-1205-story.html

https://www.tobinoconnor.com/the-owners-of-two-businesses-signed-a-partnership-agreement-but-then-one-of-them-started-treating-the-other-like-a-tenant/

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