Legal Question in Business Law in Texas
Being Sued
My Husband and I had a S corporation that sub-contracted to a company that went bankrupt and while they were trying to stay solvent they had us do work for them. Now they are suing us for the 2 payments that they paid us. Can they do this and what do we do?
2 Answers from Attorneys
Re: Being Sued
Basically, what happened is that a trustee has taken over the insolvent company. The trustee is claiming that the two payments made to you were considered a "preference" payment, to the detriment of other creditors of the bankrupt company. You should get bankruptcy counsel ASAP to protect your interest.
Re: Being Sued
Show that the work you performed to date was matched by the two payments, or that it exceeds the value of the two payments. You may also need to show that you had no idea that your subcontractor was about to file for bankruptcy.
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