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  1. #1
    Join Date
    Sep 2005

    Default Small Business Dispute with Workers Comp Carrier

    I was a small business owner (restaurant). The business was sold over a year ago. Our workmens comp insurer is suing our corporation claiming we under reported payroll. They claim all cash payments were payroll. We didn't keep great records but we did have a payroll company do our payroll. The company is being sued for $11K. One attorney advised us to offer a minimal amount to settle or let them get a judgment against the corporation. Unfortunately he was unable to advise us of the law as it pertains to us being personally sued and if they can pierce the corporate veil to get to us. The case is ridiculous as there were no claims against the insurer and they lost no money to begin with. I would like to know what the best course of action would be and if there is anything we need to worry about out of the ordinary when it comes to insurance and workmens comp.

  2. #2
    Join Date
    Sep 2005
    Behind a Desk

    Default Fraud Against Workers' Comp Carrier

    So the workers' compensation carrier is alleging fraud, on the basis that you underreported your payroll. I am surprised your lawyer wasn't able to tell you if they would be able to pierce the corporate veil; but if you negotiate a settlement, that issue becomes moot as you would make a full release of claims against both the corporation and its principals a condition of any such settlement.

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