Legal Question in Business Law in Michigan

New LLC being sued by creditors of former employer. Help, please!
We were former employees of a Michigan LLC. The owner did not handle the business well, and it became clear that he would be going out of business, costing us our jobs. One major indication was that the owner was not paying most bills, inclucing (most importantly) office rent!

Myself and the two other employees began to dicsuss forming our own company in order to: 1. Create more job security (or at least have control of our own success or failure) and 2. To try to capture the business being lost by the lack of care provided by the owner.

We formed the LLC, prepared for our start-up, and gave the owner 2 weeks notice. We have now (approximately 2 months later) received notice of a lawsuit brought by a vendor of the old company against the old company AND our new company, asserting that we are one and the same ''in essence'', regardless of what they recognize as ''our separate corporate form.''

Basically, they are claiming that since we knew that they weren't getting paid, and we are now in the same business (the old owner is no longer there), that we are liable for the debt. Are we really responsible for the old owner's debt, simply because we could see the writing on the wall and left the company before he went under?

Asked on 12/16/08, 12:06 pm

2 Answers from Attorneys

Timothy Klisz Klisz Law Office, PLLC

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Re: New LLC being sued by creditors of former employer. Help, please!

It would really depend on what the old contract said in regards to the employees of your new company. If there is a connection, they could have an argument. If not, then you have a great defense to a lawsuit. Contact me at www.kliszlaw.com to discuss details. Tim Klisz

Answered on 12/16/08, 12:24 pm

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