Legal Question in Business Law in California

Re: distribution of assets of a suspended California corp

You may be able to go after the assets of the individual shareholders. We would have to see your paperwork. Please contact us if you have any questions.

Re: distribution of assets of a suspended California corp

A suspended corporation can be revived by anyone with an interest in it; if you obtained some of the stock (preferably a controlling interest, you could revive the corporation if you wanted to.

Whether you can recover from the corporation itself will depend upon what is known as "reverse piercing" of the corporate veil. I must therefore disagree mildly with my collegaues who say it's impossible. This coporation is not a Microsoft or a Microsoft look-alike; if you have the right set of facts you may be able to attack those corporate funds.

You need a lawyer who has extensive rather than superficial knowledge of corporate law.

Re: distribution of assets of a suspended California corp

A judgment against shareholders is not enforceable against the corporation. Many people own stock in Microsoft, but Microsoft cannot be forced to pay a judgment whenever one of its shareholders loses a lawsuit.

The shareholders can pay the judgment with any of their assets, which means they can give you shares in the company if you and they so agree but that they can choose to satisfy the judgment in cash instead. If they don't pay voluntarily you can execute against their assets, but executing against the stock will make little sense unless the value of the stock is clear (you don't want a fight over whether the shares you want are really worth more than you are entitled to take).

Your claim that your judgment is senior to a deed of trust against the corporation makes no sense; since your judgment isn't against the corporation at all it cannot be senior or junior to any corporate obligation.

Re: distribution of assets of a suspended California corp

You have a right to try to seize their stock, by taking appropriate action with a writ of execution from the court where you got your judgment. If that is in California, I'll be happy to help you.

Re: distribution of assets of a suspended California corp

You have the right to try to seize (through the sheriff's levy on a writ of execution) any assets of the shareholders against whom you have the judgment (other than those assets which are exempt by law), regardless of the status of the corporation.

Among the assets you could have the sheriff sieze (and sell at an auction to apply to your judgment) is the stock of the corporation. However, your ability to get the cash out of the corporation, even if you wind up with the stock, will be limited by the claims of the corporation's creditors, which will come ahead of your claim (since you do not have a judgment against the corporation itself.

You should engage the services of an attorney to help you go after the assets of the shareholders (and to help you determine whether their stock in the corporation has any value if the corporation were to be liquidated).