My husband owned a small business- he passed away unexpectedly 2 1/2 years ago, and I have attempted to continue running the business. I wish I had closed the doors then, but wanted to try to continue his memory. We have lost money for 2 years, and I am now trying to close the business. We have a contract with Supermedia until October (I am 3 months behind on paying them) - another bad decision, as this has been the biggest waste of money. Here's my question: I think that they were Idearc at the time, and I don't have a copy of the original contract that my husband signed (I don't know if he had to personally guarantee). If I don't pay them, can they come after me personally? The company is a Sub-S Corporation. Thank you!
State/Country relating to question: Virginia
Thank you for the post, I am happy to assist you by answering your questions. Whether they can come after you personally really depends on the language of the contract, specifically whether shareholders of the S-Corp agreed to personally guarantee the contract should the corp default. I understand that the contract was executed by your husband, and more likely than not if it did contain a personal guarantee it was his personal guarantee that ceased upon his untimely passing. To be sure, you should obtain a copy of the contract, and bear in mind that if the advertising company was not made aware of his passing, but such notice was required per the terms of the contract, the failure to notify could be construed as a breach of the contract. Please let me know if you have any follow up questions or need additional guidance.
Thank you for responding so quickly. At the time of his death, he was 100% shareholder; I changed it many months later. The company reps that I dealt with after that knew him and was very much aware of his passing. I expect that I may have a difficult time obtaining a copy of that original contract from Supermedia, considering my current payment status with them. Do you have any ideas that may be helpful? Thank you again.
Thank you Lisa, is there anything in writing evincing the company's knowledge of your husband's passing?
I don't think so - I didn't think of that. I guess I should have sent them something formally advising them of his death.
ok, you should send them a letter, via certified mail, disputing liability for the sum claimed as owed and force them to produce a copy of the contract establishing the corporation's liability. They must be able to prove up the debt in order to enforce it, and they know this. Once they produce the contract you will then know what liability you have, if any, for the corporation's debt. Please let me know if you have any follow up questions.
Last question... since his death, I have signed 2 renewal contracts for advertising (no personal guarantee, just signed proofs). Does that "hurt" my case?
No, it does not as there were no personal guarantees on either contract.
Thanks for all of your help and advice!
Thank you Lisa, please remember to rate my answers positively if I have answered your questions.
Drafted Negotiated and/or Reviewed Thousands of Commercial Agreements
DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.
The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).