Legal Question in Business Law in California

Re: Summons

Typically, the officers and shareholders of a corporation are NOT responsible for the debts of the corporation, especially for a breach of contract. However, there are certain allegations that can be made to attempt to hold the officers/shareholder liable for corporate debts, e.g., if the shareholder/officer/director guaranteed a corporate obligation. There are other potential allegations that can be made against the individual shareholders/officers/directors. Without more information I cannot tell you where you stand on this matter.

However, it sounds as though YOU need representation in this matter. Since a lawsuit has been filed and you have been served you have only a limited amount of time to file and serve your response to the lawsuit. Thus, you should act quickly to hire an attorney to represent you.

Call me 805-494-6557 or e-mail: [email protected].

Website: www.donnerlaw.com

Re: Summons

First and foremost, you need to file an answer to the complaint immediately. The answer must be filed within 30 days of the date of service. Once the answer is filed you can sit back and figure out if you need to add this grocery chain as a co-defendant since their breach of your contract caused you to breach your contract with the current company. Even if the debt is valid you do not want a default judgement filed against you. Once the answer is filed you can also speak with a bankruptcy attorney to see if you have any options open on that end.

If you need help filing a quick response to a complaint please feel free to contact my office. I offer a free, no obligation consultation. You can reach my office by phone, toll free at 877-546-9918, or by email at [email protected]. I wish you the best of luck if I don't hear from you. Feel free to email or call me any time if you have any questions regarding business and contract law. I have handled these types of matters for over a decade.

Sincerely,

John Hayes, Esq.

Re: Summons

When the assets of a corporation are distributed back to the shareholders as part of the process of winding down its affairs and going out of business, the known and determinable creditors have a prior claim on those assets.

Any director or officer who participates in paying dividends or distributing corporate assets in disregard of claims of creditors may be found personally liable for defrauding such creditors. It is not necessary to pierce the corporate veil; it is an improper personal activity.

You need to see a lawyer at once. You do not say whether the summons was served on you personally or whether it names you personally, but if it does not it can always be amended to include you and the other officers and directors.

It would be a defense if the corporation had no assets and/or did not distribute anything back to the shareholders, and did not pay excessive salaries toward the end, etc.