Legal Question in Credit and Debt Law in Maryland

Re: out if business company being sued for stuff

I agree with the general principle that individuals are not liable for corporate debts beyond the investment in the corporate stock. I cannot assume that only the corporation was named and named properly in the suit and that the corporation business was conducted properly to preclude piercing the corporate veil. I cannot assume that the claim, as presented in the suit does not state a cause of action against the principals of the corporation. Of course, a lawyer should look at the pleadings ASAP to evaluate. A consultation fee would be well worth the peace of mind at the very least.

Most lawyers who deal in Bankruptcy Law are familiar with these issues and will provide a consultation for a reasonable fee which will allow you to answer and defend on the merits, pro se (representing yourself) or ignore the answer time, knowing that the only risk is corporate assets. In all events more detail is required. Always keep in mind that any circumstance presents multiple alternative courses of action or inaction with different risks. It is essential to know what the risks are and then the choice of action is a lot easier. Your question reflects some anxiety over the unknown, that is,

worry as to what might happen. Your lawyer will outline the risks and if they are negligible or non existant or can be made so, he will tell you. Tom Zimmerman

Re: out if business company being sued for stuff

Your facts are insufficient to provide complete answer. However, generally owners of a business are not personally liable for contract default on the part of a corporation that they own. However, there are exceptions and there are ways to get around this "corporate veil" (that's what it's called in legal parlance). Plus, liability may be based on theories other than breach of contract (or in fact an individual may have signed a contract that actually provides for personal liability).

You should consult an attorney with answers to these questions to determine whether you have any personal liability. If there is no money for attys, most Maryland county bar associations have lawyer referral services and pro bono legal services that may be able to assist you -- contac the bar association in your county.

Lawrence R. Holzman, Esquire

Joseph, Greenwald & Laake, P.A.

6404 Ivy Lane, Suite 400

Greenbelt, MD 20770

(301) 220-2200

fax (301) 220-1214

Disclaimer: Please note that the posting of this response is not intended to constitute legal advice. You should contact an attorney to obtain information applicable to your situation. This posting is not confidential or privileged and does not create an attorney/client relationship.

Re: out if business company being sued for stuff

I can't say whether you owe the money without looking at the facts - if the warranty was breached, you (the corporation) may owe something, but maybe not even then. As to your personal liability, unless there was either a defect in corporate form or some fraud or abuse justifying disregard of the corporate entity, liability of the corporation is not your personal liability. But if you do not defend, you will lose, and once a judgment is entered, whomever it is entered against will owe the money.

If the corporation has no more assets and you are sure that the corporation was properly operated, and if you are not now personally being sued, it may be OK to let a default be taken, but I would suggest that you consult with a lawyer to be sure (it can still be inconvenient to deal with such a judgment, even if you do not end up having to pay). If you are being sued personally, you would be foolish not to defend.