Legal Question in Business Law in Florida

Out of business/broken lease/late rent

A small retail business that I was involved in (as a minority shareholder - 20%)recently went out of business. We were behind on the rent and had to close before the lease expired. I was listed President of the corporation, only because I was there during most of the daytime hours, in case a corporate rep was needed to answer questions. My friend and his wife had an 80% share between them - he as VP, she as Secretary. In order to get my 20% vested interest in the corp., as an employee I worked 40+ hrs./wk. for 1 year, getting half of those hours ''paid'' towards my 20% share of the corp. in lieu of actually having to pay cash for that 20%. Now that we have had to close our doors and break the lease, what could be my possible liabilities? Am I protected since this business was incorporated?


Asked on 11/16/01, 1:12 am

3 Answers from Attorneys
Alexander M. Rosenfeld Rosenfeld & Stein, P.A.

Re: Out of business/broken lease/late rent

If you did not personally guarantee the lease, you have no personal liability.

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Answered on 11/26/01, 5:45 pm
Randall Reder Randall O. Reder, P.A.

Re: Out of business/broken lease/late rent

To hold you responsible, the landlord would have

to claim you personally guaranteed the corporate

debt or claim the corporation was a sham. Once he

gets a judgment against the corporation, he could

also claim there was a fraudulent transfer of assets

from the coporation to yourself. I suggest you consult

an attorney to make sure you do not run afoul of

the fraudulent transfer statute.

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Answered on 11/20/01, 2:00 pm
Peter Gonzalez Sanchez-Medina, Gonzalez, Quesada, Lage, Crespo, Gomez & MachadoLLP

Re: Out of business/broken lease/late rent

If you did not personally guaranty the lease, then you have no personal liability to the landlord. If the corporation was the tenant, then the landlord can only go after the corporation. If the corporation has no assets, then there's not much to worry about. Being named President of the corporation does not expose you to any personal liability. Seek the advice of counsel and good luck.

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Answered on 11/16/01, 1:15 am


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