Legal Question in Business Law in California

Re: identity theft

Well, first, this isn't identity theft.

Whether what happened to you is a result of evil intent or just bad management (or some mix thereof) depends upon a lot of facts that you don't give, probably don't know, and which may be difficult to impossible to deduce.

Further, you don't say specifically that the business was a corporation, but since you mention stock ownership, I'll assume it was.

One of the attributes of the corporate form of doing business is shelter (of the owners) from personal liability for business debts. The shelter may be lost as a result of (1) giving of personal guarantees, or (2) "piercing the corporate veil," which is occasionally possible where the owner(s) of a corporation disregard corporate formalities and treat the corporation as their "alter ego."

When an investor "comes in" to a company, there is ordinarily a written agreement covering the investor's role -- e.g., how much money will be invested and upon what terms (stock or notes, board seats, management roles, etc.). Any analysis of whether you were cheated must begin with a review of the terms of the investment agreement, in particular how the investor came to be the majority owner. Fraud is always a possibility.

The second main avenue of inquiry is the mismanagement that triggered the failure of the business. Perhaps the investor, now in a management role, is culpable of dereliction of duty, breach of fiduciary responsibility, or something upon which a lawsuit can be based. Some, but not all, mismanagement contains the seeds of a minority shareholder lawsuit.

Next, the record in the bankruptcy case would have to be reviewed by an attorney representing you. Bankruptcies require a lot of information to be placed "on the table" by the bankrupt. The case files will (or should) reveal a lot.

Finally, the question arises as to why the creditors (not "debtors") feel they can pursue you personally. You should be double-protected, first by the corporate form of doing business, then also by the discharge of the debts as a result of the bankruptcy proceeding.

Something is really amiss here. You may have been cheated by the investor, but it is also possible that you are unnecessarily being taken advantage of by the creditors and/or have received poor (or no) legal advice over the course of this matter.

I recommend you get competent legal assistance at once. Among other things, delay may cost you the right to sue through running of a statute of limitations. This is the kind of legal work I do, and I would be pleased to give you a free initial consultation by phone, e-mail or in person.