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Individual bankrupting corporate debt
Gerald,
There are a number of issues, including the fraudulent transfer from
the corporation to the individual that the creditors of the
corporation have against the individual, which could give rise to a
claim of nondischargeability in the individual case. I always ask to
see the corporate tax return to see if the particular assets have been
scheduled in the corporate filing and on the corporate accounting
books and records. That establishes a factual record of ownership.
If the corporation has assets of value the liquidation of that
equipment inurs to the benefit of the corporate creditors. The client
and corporation may need to seek separate counsel, as there is a
conflict between the two, and an accountant should be consulted on the
corporate liability and tax issues, as well as the result upon both
the corporation and individual in the event of the dissolution of the
corporation. Take a look at California Corporations Code on the issue
of corporate dissolution and the effect on liability to the
shareholders following dissolution.
Lou Esbin
>
>
>
> The corporation isn't filing, the individual with corporate debt is
filing
> and Is looking for a way to get the assets out of the insolvent
corporation,
> and onto his personal balance sheet, where he does have a wildcard.
Perhaps
> if they were part of his compensation, assuming arguendo I could
make a case
> that in the totality of circumstances the compensation was
reasonable? (His
> compensation is $25k less in 08 than it was in 07).
>
>
>
> Gerry
>
>
>
> Gerald McNally
>
> McNally & Associates, P.C.
>
> 206 N. Jackson St. #100
>
> Glendale, CA 91206
>
> 818.507.5100
>
The post was migrated from Yahoo.
The corporation isn't filing, the individual with corporate debt is filing
and Is looking for a way to get the assets out of the insolvent corporation,
and onto his personal balance sheet, where he does have a wildcard. Perhaps
if they were part of his compensation, assuming arguendo I could make a case
that in the totality of circumstances the compensation was reasonable? (His
compensation is $25k less in 08 than it was in 07).
Gerry
Gerald McNally
McNally & Associates, P.C.
206 N. Jackson St. #100
Glendale, CA 91206
818.507.5100
The post was migrated from Yahoo.
Corporations are not entitled to a wildcard or any other exemptions for that
matter. Transfer of the equipment from the corporation to the individual is
a fraudulent transfer and would subject individual to fraudulent transfer
claims. Unlikely, but if creditors wish to push the matter, this transfer
could imperil individual's discharge.
Best chance of saving equipment is for individual to buy it from the
corporation at fair market value - still a fraudulent transfer risk but much
lower if you have equipment appraisals to support the price. I know the
answer to this is: individual does not have the money.......
Client can decide whether to risk the challenge to his discharge.
David A. Tilem
Certified Bankruptcy Specialist*
Law Offices of David A. Tilem (a debt relief agency)
206 N. Jackson Street, #201, Glendale, CA 91206
Tel: 818-507-6000 Fax: 818-507-6800
* Bankruptcy specialist cert. by State Bar of CA Bd of Legal
Specialization.
The post was migrated from Yahoo.
Dear Group:
Client with corporation and $170k of corporate debt, $40k of individual
debt.
Wants to Ch7, individually, abandon the corporation, but corp has power
equipment with liquidation value of $20k.
1. Wants to exempt the power equipment (wild card). How can I make
this work?
No other assets.
2. When's the best time for him to set up a new corporation for him to
transfer his SCLB license to?
Gerald McNally
McNally & Associates, P.C.
206 N. Jackson St. #100
Glendale, CA 91206
818.507.5100
The post was migrated from Yahoo.