Legal Question in Civil Litigation in New York

Lawsuit against individual / Subchapter S Corp

Are the assets of a subch S corp actually owned by the individual shareholders? My mother and cousin bought land jointly titled to them personally; then built house on it under the name of the S corp (NY) of which they are equal shareholders. All capital contributions and construction expenses paid by corp. Rental of house taken care of and rent checks deposited through corp. All bills, taxes, etc paid by corp. Cousin now wants to sell house as house is worth 3 times more than invested, but mother does not. He has sued her as individual instead of suing the company. Is this appropriate? Judge says it doesn't matter and will order house be sold at auction if no compromise. We feel judge is incorrect - mother didn't build house, corporation did. Or is this too close as only the two shareholders? Is proper business protocol being followed here? Again, only land is in individual names, building constructed by the company. Judge says company is shell. Company in existence many years prior to construction of house. Please help, thank you.


Asked on 12/27/05, 1:17 pm

1 Answer from Attorneys
Meyer Silber The Silber Law Firm, LLC

Re: Lawsuit against individual / Subchapter S Corp

The corporation and individuals should both be named because both have an interest in the property. There are options beside auction, so the judge's reaction sounds a bit odd. Please contact me if you have any further questions.

Read more
Answered on 12/27/05, 3:08 pm


Related Questions & Answers

More General Civil Litigation questions and answers in New York