Legal Question in Credit and Debt Law in Georgia

Bankrupt LLC & Personal Liability from a 15 yr old financial stmt

I have a client that has been in the construction business for 10-15 yrs. He began as a sole proprietor, then inc and lastly formed an LLC. The LLC was forced to file bankruptcy & one of the creditors he had been doing business with is taking him to court, saying he is personally liable for the debt. Their reasoning for this is based on a personal financial stmt he provided them when he first began using this supplier as a sole proprietor 10-15 yrs ago. Each time he changed the business entity he made them aware of it and provided them with the new name, federal ID #, etc. so they were definitely aware of him not being a sole proprietor anymore. Is it legal for them to do this? This is an elderly gentleman I am asking this for & he is being put thru a lot of unnecessary grief I feel. The fact that his business had to file bankruptcy was enough for him to go through. Now to have this creditor pursue this is ludicrous (considering they were notified by court doc when the bankruptcy was to be finalized & had the opportunity to appear to express their intentions.) Is it within their legal rights to hold him liable for the LLC's debt based on a financial stmt 10-15 yrs old?


Asked on 8/14/06, 2:19 pm

2 Answers from Attorneys
Scott Riddle Law Office of Scott B. Riddle, LLC

Re: Bankrupt LLC & Personal Liability from a 15 yr old financial stmt

There is no way to tell without the facts and documents. Since he has been sued, the only reasonable course of action is to hire a lawyer to defend.

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Answered on 8/14/06, 4:56 pm
Glenn M. Lyon, Esq. MacGREGOR LYON, LLC, Business Attorneys

Re: Bankrupt LLC & Personal Liability from a 15 yr old financial stmt

Even if your client has incorporate or formed an LLC, he may still be liable personally either through contract or through a process known as "piercing the corporate veil". He needs to hire a local attorney ASAP to deal with the suit.

If you would like to discuss any issues further, please feel free to contact my office. My contact information is below. Thank you.

The foregoing is general information only, not specific legal advice. No attorney/client relation has been created or should be implied.

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Answered on 8/21/06, 5:33 pm


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