QUESTIONS FOR A LAWYER
The Problem: Fred Furrer was found “guilty” of “theft by over-compensation” from HYRAD Corporation
while acting as its President, CEO and COB. He was ordered to pay $1M back to the corporation, which he doesn’t have. In fact, the total of Furrer’s personal assets other than his ownership interest in HYRAD Corporation is less than $0.5M. HYRAD Corporation was worth at least $5M at the start of the derivative action lawsuit in 2007, but is nearly worthless now. What should he do?
1. What prevents Furrer from being indemnified, either by the Indemnification Clause in the Bylaws
, or by Mandatory Indemnification?
2. Is taking Furrer’s personal assets the only way to satisfy the $1M money judgment? What about unpaid compensation due from HYRAD, credit for companies taken from Furrer and given to HYRAD, or exchange of HYRAD stock?
3. Has Furrer lost all control of a company that he owns 70% of? In other words, have the minority shareholders
taken over total control of HYRAD Corporation?
4. Is Furrer entitled to a re-trial since the Circuit Court Judge has admitted that he is unfamiliar with business
law? In other words, since it wouldn't be fair for the Judge to be taking counsel from the plaintiffs’ attorney, shouldn't Furrer have an opportunity for an impartial trial?
5. If the derivative action lawsuit provided no benefit to the corporation, shouldn’t the minority shareholders be paying the litigation costs for both sides, per state statute?
6. Is there a bankruptcy
option that would permit a gradual payback of debts without losing assets?