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I was a president, CEO and 50% owner of a small, closely held

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I was a president, CEO and 50% owner of a small, closely held company in Alabama. There were 2 other stockholders. (One was a brother) In July of 2005, in a surprise Directors meeting, where their attorney showed up, I was voted out. They came up with some false claims and filed a lawsuit, which they agreed to drop if I gave up my shares. Financially unable to fight them,(they had a millionaire brother-in-law join them) around January 30th, 2006 I signed an agreement, selling my shares for $1. My Brother ended up buying out the other shareholder. I'm now hearing that the company is having financial problems. My concern is that with many of the creditors that we did business with, all 3 officers (including me)had to sign personally, to obtain credit. Do I need to contact all 100 companies that we did business with to let them know that I no longer work there? If so, does it need to be a registered letter? Is there required wording? Is there a statute of limitations on such signatures?
Submitted: 5 years ago.
Category: Business Law
Expert:  Roger replied 5 years ago.

If you singed personal guarantees, you're obligated to the companies for any debts incurred while you were in the business. Any debts incurred after that point would not be yours and you would be entitled to indemnity from the other owners for those debts.

 

Also, your agreement may have a clause in it that says the company relieves you of any obligations, or that it assumes your part of any personal guarantees/obligations. If so, this would give you another claim for indemnity from the company.

 

In Alabama, the statute of limitations on an open account is 3 years from the last payment or charge. Thus, claims would be barred only if the accounts have been dormat for more than 3 years.

Customer: replied 5 years ago.
The agreement does have those clauses. However, there is one charge that has been hounding me. In August, 2005, (I left the company as president in July), The new President decided to switch cell phone companies and not pay the last month bill and cancellation penalties. Since my name was on the agreement along with the company, Verizon chose to come after me for the bill of $900.00. I wasn't informed that there even was a bill until Feb of 2006, when a collection agency called me. All my explanations have gone nowhere. The charge has been sold to 3 different collection agencies, with calls 3 or 4 times a week. It's been 3 1/2 years and the charge dissapeared from my credit report 2 months ago, only to suddenly appear as a NEW Charge with a NEW date of Nov 2008. My credit score dropped 75 points. My American Express wrote me to tell me, due to my new credit problem, my $10,000 limit is now lowered to $500. If I'm not liable, is there a way to stop these people?
Expert:  Roger replied 5 years ago.

You or your attorney should write a letter indicating first that the debt is barred by the applicable statute of limitations. Also, you should send them a copy of your agreement showing that your responsibilities were assigned to the new owners, and therefore, you're not responsible for the debt.

 

It will likely take a letter from your attorney to get them off of your back, although the Fair Debt Collection Act does allow you to send them a letter demanding that they not contact you anymore.

Roger, Attorney
Category: Business Law
Satisfied Customers: 27264
Experience: BV Rated by Martindale-Hubbell; SuperLawyer rating by Thompson-Reuters
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