I am currently a c-corp 50% shareholder that has been sued by the other 50% shareholder to dissolve the corporation. The corporation was set up using a “Robs” Rollover for Business Startup. It is a successful business! We transferred from our IRA accounts into a corporate 401k Plan that bought shares into our company. The terms right now are currently being worked on due to the lawsuit I am forced to sell my shares to the other 50% shareholder due to he will not sign a non-compete so the receiver will have a tough time trying to find someone to buy the company. My question is in defending myself in this lawsuit I have incurred $50,000 of legal bills and wanted to see if you thought I could use any of the monies he is buying my out with to pay my legal bills and what is left over could then be put back into the corporate 401k plan then transferred to my IRA ?

Thanks for the help!
JG