Results 1 to 6 of 6
  1. #1
    Join Date
    Jul 2012
    Posts
    2

    Post Switching Corporations to Avoid Paying Debt

    My question involves business law in the state of: Fla.
    Corporation A is doing business with my company, Racks up 38k in bills then shuts down . I get a judgement of 38k in Florida, collect about 5k garnish from bank account. Corp A closes down opens up Corp B at same address doing same business as corp A.. My question is can I go after the owner of Both corps personally. He is a sole owner of both corps no assets coporately but plenty personally

  2. #2
    Join Date
    Sep 2010
    Posts
    19,678

    Default Re: Switching Corporations to Avoid Paying Debt

    Welcome to the construction industry. It will be hard to attach the new company. You should have tried to attach him personally as well.

  3. #3
    Join Date
    Sep 2005
    Location
    Behind a Desk
    Posts
    98,846

    Default Re: Switching Corporations to Avoid Paying Debt

    ... Or have him personally guarantee the debt.

    Are we talking about the sale of merchandise or of services? If the former, depending on the facts, it may be possible to go after the merchandise.

  4. #4
    Join Date
    Jul 2012
    Posts
    2

    Default Re: Switching Corporations to Avoid Paying Debt

    Just services, the merchandise we were hauling was recycling goods which are worthless to me.Is it that simple in Fla. to avoid paying just close the company and start a new one?

  5. #5
    Join Date
    Sep 2005
    Location
    Behind a Desk
    Posts
    98,846

    Default Re: Switching Corporations to Avoid Paying Debt

    We can't rule out the possibility that you'll find a way to argue that the new company is a successor to the old, and thus liable for its debts, or to trace assets from the old to the new (or from the old corporation into the private holdings of the owner) such that you might be able to reach those assets to satisfy a debt; but that determination is beyond what we can help you with.

    There is a certain class of businessperson who will go through a succession of corporations like a snake changing his skin - and they tend to be very good at shedding the liabilities of past corporations. (Not that this guy necessarily falls into that category.)

  6. #6
    Join Date
    Mar 2008
    Posts
    1,995

    Default Re: Switching Corporations to Avoid Paying Debt

    Quote Quoting switch
    View Post
    My question involves business law in the state of: Fla.
    Corporation A is doing business with my company, Racks up 38k in bills then shuts down . I get a judgement of 38k in Florida, collect about 5k garnish from bank account. Corp A closes down opens up Corp B at same address doing same business as corp A.. My question is can I go after the owner of Both corps personally. He is a sole owner of both corps no assets coporately but plenty personally
    You might want to check out "piercing the corporate veil", see:

    http://en.wikipedia.org/wiki/Piercin...corporate_veil

    You'll need to establish that the corporation is a mere "alter go" of the person, see:

    http://legal-dictionary.thefreedictionary.com/alter+ego

    One way of doing it is determining how the company's books and records are kept, if board meeting are held, and how officers are paid etc. If he keeps sloppy books and records, held no board meetings if it's a "corporation", writes checks to himself with no documentation, then he is a candidate for "piercing the veil". There is also a strong possibility he never paid any income taxes on the money he screwed you out of either, and for the amount of money you're talking about, I'll swarm over him, and threaten to get the IRS on him.

    I was a credit manager for a while, had a customer who tried something similar on us down in Tx, and while we spent over $10k in lawyer fees and other fees, we had him bring his books and records in for a deposition on how he keeps his books and records. As it turned out, he tried the same deal with a competitor of ours, that company bought him to court based on the results of their deposition, and WON. He owed this other company $50,000. When I told this guy we plan to do the same thing to him, and use the same exact lawyer, he paid up. This is after he gave us a brave "I'll see you in court" comment. While $10K in legal fees sound like a lot, but to make this guy sweat and squirm is all worth it, though he owed us over $125,000 in our case.

    1. Sponsored Links
       

Similar Threads

  1. Support Arrears: How to Avoid Paying Child Support Arrears
    By Loves5kids in forum Child Custody, Support and Visitation
    Replies: 1
    Last Post: 10-06-2011, 02:28 PM
  2. Chapter 7: Can I Avoid Paying for Pre-Approved Credit Cards
    By laydluck in forum Bankruptcy Law
    Replies: 1
    Last Post: 12-24-2009, 09:45 AM
  3. Parking Tickets: Switching License Plate From Different State To Avoid Ticket In NYC?
    By stevspwr in forum Moving Violations, Parking and Traffic Tickets
    Replies: 3
    Last Post: 04-23-2008, 11:18 AM
  4. Getting Fired: Terminated 'For Cause' to Avoid Paying Severance
    By michgineer in forum Employment and Labor
    Replies: 7
    Last Post: 08-29-2007, 10:52 AM
  5. Chapter 7: Fraud By Bankrupty Individual To Avoid Paying Judgment Debt
    By lewist57 in forum Bankruptcy Law
    Replies: 6
    Last Post: 03-13-2007, 06:56 AM
 
 
Sponsored Links

Legal Help, Information and Resources