Legal Question in Bankruptcy in Indiana

personal bankruptcy afftects business owner

i am 49% owner of a small business that is in serious financial distress---my partner, who owns 51%, is going thru a divorce and has filed personal bankruptcy, he has told me that his trustee is going to look at the business assests---how will this effect me, what are my rights---i dont want to file bankruptcy personally or on the business---i thing we can recover our business losses and make our business finances work---what should i do???---before this my personal credit has been excellent.


Asked on 2/25/02, 2:33 pm

1 Answer from Attorneys
C. David DuMond Law Offices of David DuMond

Re: personal bankruptcy afftects business owner

What you should do is this: take copies of your company's articles of incorporation, by-laws, shareholder agreements, minute books and financial records -- with a bag of money -- to a real attorney. This sounds way too complicated to deliver a response based on your question. I can tell you this: both the bankruptcy trustee and the soon-to-be ex-wife may have enforceable interests in your partner's shares. And if it happens that your business is not incorporated, it could be even more complicated. Be prepared to show your real attorney how it is that you own 49% of the business. If the business is losing money with no immediate prospects for success, the bankruptcy trustee will probably decline to get involved. The soon-to-be ex-wife will probably want to make sure the business is really bad before she gets involved, but may swap her husband for 100% of some choice real estate for 100% of his share of the crummy business. Lots of permutations come to mind. So -- see a lawyer. Sometimes they are worth the money.

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Answered on 2/25/02, 8:54 pm


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