In a legal proceeding a couple of months ago, I was unfortunately at the disadvantage of not being represented by my attorney. (There is a reason which is unrelated to this question.)
I'm not a lawyer; I have no idea how things are supposed to proceed in court. I'm also a CEO of a startup which was pre-revenue and at the time of this event, had not yet closed our current round. As is the way of startups, our owners' draw was less than $500 a month for both myself and my co-founder for the entire preceding year; neither of us had been paid in a very long time.
I am not the only managing member of our company, and while technically I could access any aspect of the company I demand, our CFO has authority over all of our financial concerns and my co-founder, our COO, manages our day-to-day operations. Of the money in the business bank account, every last dime came from accredited angel investors on convertible promissory notes (preferred - all the investors have repayment preference.) At the time of this event, our company was still formed as an LLC.
My question is this: the judge asserted that simply because technically I have access to do so, I could be expected to clean out the business bank account to address whatever individual, personal matters were at hand.
- Surely I can't be ordered to steal from our investors? Cleaning out the business bank account would be embezzling or fraud or both?
- Is there a remedy for a judge who "orders" you to break the law? (Not asking if the order would be tossed out - asking if any kind of rebuke exists)
Noteworthy: Since no circumstances exist under which I will be compelled to rip off my investors, I simply proposed a settlement that leveraged an inheritance, hence this question is not an issue of my personal circumstances; I'm just curious.