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December 05, 2008

    Business Law
Personal Liability for Corporate Debt?
Thomas Pedreira

Q. 

A corporation owed me money and did not want to pay. I took the company to court and got judgment for about $4000. However, during this period they sold the company and now they are saying they have no money or assets to pay me. 1. Is the president personally liable for the judgment? 2. Is the new owner liable, since the claim was filed before he purchased the company? In the mean time the president opened another company and transferred rest of his assets to new company. Can he really do that and getaway?



-- Anonymous

A. 

Chalk this one up to experience - just because you get a judgment against a company, there is no guarantee you are actually going to get paid. One of the reasons for incorporating a business is to avoid personal liability for corporate debts and liabilities in just this type of situation. So, if proper formalities were followed by the president of the company, you may be out of luck in trying to collect the debt against him personally.

One thing to note here, though, is that the business was apparently sold while your litigation was pending. You should press on the new owners for payment whereupon they may press on the old owner to pay a debt that may not have been disclosed to them, and this may get you paid. Another thing to look into is whether or not the business was insolvent when it incurred a debt to you. This may be a basis for going after the owners. Regardless, you should consider recording a judgment lien against the corporation in the county where it is located. This will not automatically get you paid, but it will make the judgment a public record so if that someday if anyone else owes money to the corporation, they may have to pay you instead.



-- Thomas Pedreira



    Financial
Not Financial, but You Need Help.
Loretta Salzano

Q. 

I'm 16 and I got into trouble for skipping school and having people over. One guy took some bottle rockets. My parents flipped out; they hit me so I snuck out to make them think I came back. My parents have hit me, spit at me and pushed me into doors. I can't stay there. What do I do?



-- Crystal

A. 

This breaks my heart. It sounds like there are all kinds of issues going on in your home, and that you all could use some support. I strongly suggest that you talk with your school counselor. Your counselor will be able to coordinate getting you and your family the help that you need. The counselor can also work with you to help you find a more suitable place to live if that's what's necessary.

Also consider reaching out to a teacher or other adult you can trust. Maybe you have a good friend with a good parent?

There are all kinds of groups out there with the sole purpose of helping kids much like you struggling with similar problems. I know because I serve on the boards of two of them!

While you're doing all that, follow the golden rule. Treat them how you'd like to be treated. Your parents' behavior is horrible and inexcusable. Still, if you do the right thing (like go to school, don't have friends over without permission, don't sneak out, etc.), maybe your parents will do the right thing, too. It sure will make it easier for them to parent (and I say that as a parent).

These are not insurmountable hurdles, and I'm hopeful that you and your parents can work them out and live more harmoniously.



-- Loretta Salzano






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