Question
Chioma, a successful 56-year-old entrepreneur with a diverse portfolio of businesses including restaurants and nightclubs, employs Azi, a 23-year-old manager, at one of her nightclubs
Chioma, a successful 56-year-old entrepreneur with a diverse portfolio of businesses including restaurants and nightclubs, employs Azi, a 23-year-old manager, at one of her nightclubs named Trappings. Azi has proven his managerial prowess at Trappings, earning respect from his colleagues and demonstrating a talent for devising effective marketing strategies. Recognizing Azi's potential, Chioma proposes that they collaborate on a new club called Castle. Despite Azi lacking funds, Chioma assures him that she can reimburse him for his stake in the business once it becomes profitable.
The startup costs for Castle amount to $100,000, and the two agree verbally that Azi will own 25% of the business while Chioma will hold the remaining 75%. To repay Chioma for his ownership share, Azi agrees to work as the manager of Castle without a salary. However, due to his unpaid role at Castle, Azi has to take on a second job to meet his financial obligations, resulting in him working nearly 80 hours per week overall.
Unfortunately, Castle fails to achieve success, and after 8 months of operation, the business accrues significant debt, leading to tension between the partners. Chioma attributes the business's struggles to Azi's lack of commitment, believing that Azi's second job is distracting his attention from Castle. In contrast, Azi feels dismayed by Chioma's accusation, arguing that his second job is necessary for his livelihood. Furthermore, he believes that Chioma should be contributing more to the business beyond financial contributions.
The two have agreed to close Castle down, but before dissolving the business, they must pay off all the business's debts amounting to $80,000. However, a disagreement arises regarding the division of this financial responsibility. Chioma expects Azi to contribute $20,000 (equivalent to 25% of the debt) toward the repayment, but Azi disagrees with this allocation. Having already worked without compensation at Castle for 8 months, Azi is financially strained and unable to cover the additional $20,000 that is being demanded of him.
Q: Chioma and Azi were able to settle their dispute regarding Castle. However, Azi is still bitter over what has transpired, and he takes out a loan to start his own club right next to Trappings. He calls the club Trappinz and the logo for Trappinz looks very similar to Trappings. Many club goers report getting confused by Trappinz and Trappings and think it is the same club. As Chioma's lawyer, what would you recommend to her?
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