Judgment . . . - Posted by JoeKaiser

Posted by Bud Branstetter on December 23, 1999 at 05:51:06:

In Texas a defunct corporation may mean that the franchise tax was not paid. If so then it is not licensed to operate. The officers may then be personally liable for its debts. I’m sure you’ll have attorneys delving into it.

Judgment . . . - Posted by JoeKaiser

Posted by JoeKaiser on December 23, 1999 at 01:45:12:

Contractor shuts down his corporation in late 93. Still owes suppliers.

Suppliers start suing corporation in 94. Some sue the contractor personally as well since the corp is defunct. Judgments happen.

Contractor files personal bankruptcy in 96, discharging all personal obligation on the debts. Judgment creditors give up all hope of collecting from a bankrupt and a defunct corp.

Fast forward to today . . .

Contractor’s long since defunct corporation ends up with a $30k windfall they don’t yet know about (a property the corp owned and presumably abandoned went to a foreclosure sale where there was bidding activity).

We step in and buy the judgments rendered against the corp in 94. Creditors all believe they’ve been bankrupted away so it didn’t take much dough to get them.

We maintain the judgments are still valid as to the corp. and intend to garnish the funds now being held on behalf of the corp. (it never filed bankruptcy).

Seems like a go, but something tells me I’m missing something. Why wouldn’t this work?

Joe

Re: Judgment . . . - Posted by JD

Posted by JD on December 23, 1999 at 11:38:16:

I would be concerned about possible priority claims from unpaid employees and/or unpaid withholding tax. Just a concern, I do not have any first hand experience with this situation. But, I did run into a situation recently where the personal property of a corp. was seized by the State for unpaid wages and withholding, in spite of Judgments of record.

Re: Judgment . . . - Posted by JD

Posted by JD on December 23, 1999 at 11:11:25:

I’d be concerned about possible priority claims from unpaid employees and/or unpaid withholding tax. Just a concern, I do not have any firsthand experience with a similar situation. But, I ran into a situation recently where the State Dept. of revenue seized the personal property of a Corp. (for unpaid wages and withholding), in spite of the fact that there were Judgments of record.

Re: Judgment . . . - Posted by JPiper

Posted by JPiper on December 23, 1999 at 08:12:42:

Looks like a slick move to me…unless there’s something unique about those particular funds in your state that would preclude them from attachment. Can’t see why that would be though. I’d be interested in what you find out. I think Bud makes an interesting point too…especially if the officers have filed personal bankruptcy and NOT included the corporate judgments in that filing. They may have had time to reestablish to some degree, and now they don’t have personal bankruptcy open to them.

JPiper