Legal Question in Business Law in California

Arbitration claims against a forfeited corporation
Can a creditor bring an arbitration claim against a forfeited corporation that operates in the state of California? The forfeited corporation is in breach of a contract that contains an arbitration clause. Assests of the forfeited company have been distributed to stockholders in fraud of creditors. In this case, can a suit be brought against the stockholders?

Asked on 10/03/07, 4:11 pm

2 Answers from Attorneys

Terry A. Nelson Nelson & Lawless

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Re: Arbitration claims against a forfeited corporation

If you can prove the required facts to show individual liability or improper receipt of funds by the shareholders, sure you can sue, maybe force arbitration. Whether you can is a question that has to discussed in detail with counsel, as well as the pragmatic financial decision to invest money in such suit in consideration of the likelihood of recovering any. There isn't a corporation left to sue, only a bunch of individuals who may or may not have any available assets to collect against at the end of the process. Feel free to contact me if the case is in SoCal and you're serious about pursuing it.

Answered on 10/03/07, 5:04 pm

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