Legal Question in Credit and Debt Law in California

Re: loan made to president of a corporation for that corporation

It depends how the check was written. Since payroll can be a personal obligation of the owner, you may be able to still sue. Please call me if you have any questions.

Re: loan made to president of a corporation for that corporation

You say that you made the loan to the owner as well as the corporation, but can you prove it? Was there a written promissory note that was personally guaranteed by the owner?

Under California law, there is a strong presumption against liability of the owner unless they personally guaranteed by the owner or if you can prove the elements of alter ego liability. If you don't have a personal guarantee, then you will need an experienced litigator that will be able to prove alter ego liability.

Re: loan made to president of a corporation for that corporation

Mr. Starrett is right. Nevertheless, the big questions which still remain are:

1. How much money is at stake here? Unless the amount loaned is enough to justify a lawsuit handled by an attorney you are probably out of luck; and,

2. Did the owner maintain his corporation's legal formalities (i.e. have his annual corporate meetings, maintain corporate records, keep his and the corporation's bank accounts separate, etc.)? It sounds as if he didn't do so, so a competent attorney could go after him personally under an alter ego theory of liability.

There are no guarantees in litigation. However, if you have enough money at stake, you should see a litigation counsel like me to see what can be done about pursuing the former employer.