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  1. #1
    Join Date
    Nov 2011
    Posts
    2

    Default What Happens if I Don't Defend the Company from a Lawsuit

    My question involves business law in the state of: Mass.
    I have a corporation which is not doing well - the company owes money to a bunch of subs. The company has no money, deeply in debt. I have met with a lawyer a few times, and have agreed the best course of action is for the company to go out of business, and to file personal bankruptcy down the road if necessary.

    One of my subs is suing me for non-payment. Specifically breach of contract, quantum meruit and violation of MGL chapter 93A Section 11, and he's trying to enforce a mechanic's lien at the property where the work was done (there are other parties named in the suit, but I am not personally named).

    It looks like he is way outside the filing window to enforce the mechanic's lien, but I'm not sure it matters.
    I don't want to have to hire an attorney to defend money I don't have, so my questions are this:

    It says I have 20 days to respond - what happens if I never respond?
    what happens if I don't hire an attorney and mount no defense to this suit?
    Should I file Articles of Dissolution? Do I become personally liable then? If so, when? - There are still a bunch of loose ends to tie up, does that all need to be done before I file?
    Any other advice?
    Thanks!

  2. #2
    Join Date
    Sep 2005
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    Posts
    98,846

    Default Re: What Happens if I Don't Defend the Company from a Lawsuit

    If you default, you can expect a default judgment to be entered. If the judgment is only against corporate assets, then the judgment holder can only pursue corporate assets - but they may haul you into court and try to argue that you're holding or concealing funds or assets that belong to the corporation. Dissolving your corporation won't magic away a lawsuit.

  3. #3
    Join Date
    Nov 2011
    Posts
    2

    Default Re: What Happens if I Don't Defend the Company from a Lawsuit

    Thx Knowitall! any answers to the other questions?

  4. #4
    Join Date
    Sep 2005
    Location
    Behind a Desk
    Posts
    98,846

    Default Re: What Happens if I Don't Defend the Company from a Lawsuit

    Your other questions depend on facts we don't know. We don't know the nature of the causes of action made against the corporation. We have no way of determining your potential personal liability for the debt. We don't know anything about the corporation's assets or how you have managed them. If you need that type of analysis, you need to sit back down with the lawyer and provide him with the details of your situation, anticipating that you'll pay for an hour or two of his time.

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