Bankruptcy Law

Bankruptcy Law Questions? Ask a Bankruptcy Lawyer.

Ask a Lawyer,
Get an Answer ASAP!

Bankruptcy Law

Can I sell my shares in my S Corporation to a newly formed

Customer Question
company that I own and...
Can I sell my shares in my S Corporation to a newly formed company that I own and get away with not paying the unsecured creditors?
Submitted: 8 years ago.Category: Bankruptcy Law
Show More
Show Less
Ask Your Own Bankruptcy Law Question
Answered in 2 hours by:
11/4/2009
Bankruptcy Lawyer: JoeLawyer, Attorney replied 8 years ago
JoeLawyer
JoeLawyer, Attorney
Category: Bankruptcy Law
Satisfied Customers: 767
Experience: Attorney in the practice of Bankruptcy Law since 1996
Verified
Unlikely. You normally have to report such transfers if they occur within 2 years before you file your bankruptcy petition in #10 of the Statement of Financial Affairs, which is part of your bankruptcy petition. If you do not receive fair market value from the buyer, the Bankruptcy Court will look very suspiciously at the transaction. If you - or a company you own - are also the buyer, I think this will raise a major red flag. If you simply don't report the transaction and the Court finds out, it might become a criminal prosecution (and the United States Trustee, a department of the United States Department of Justice, is who oversees bankruptcy cases and they don't miss much).

You cannot wait until the case is filed to do the transaction until or unless the Bankruptcy Court abandons its interest in the corporate stock, and if the court is not interested in liquidating the stock then there's no reason to do the transction anyway.

Also I will add that most States let creditors go back even further than the 2 year reporting period the Bankruptcy Code requires to avoid fraudulent transfers under the State's fraudulent transfer act, so sometimes even waiting 2 years after a transaction before you file is not foolproof. Nevada has a 4 year look-back (see HERE).

So, such a transaction either before or after the case is filed would probably cause much more harm then good, potentially resulting in criminal actions. Trust me - the Bankruptcy Court has seen EVERYTHING and is fooled by NOTHING. If you go in with clean hands, you can usually get a discharge and a fresh start. If you go in trying to manipulate the system, you normally end up regretting it.

I'm not saying this to lecture you or anything, but because I have seen people try this kind of stuff and crash and burn, and I don't want to see you get in trouble to save some money - it's just not worth it my friend.

Good luck!

Joe

LEGAL NOTICE: I am only licensed to practice law in certain state(s) and I cannot give legal advice to someone who does not reside in a state in which I am licensed, nor shall anything I say in the above answer or elsewhere on this site be deemed legal advice, even to someone who resides in a state in which I am licensed. Fees I receive for answering questions are paid for information, not for legal advice. This forum is designed to provide general information only, and information herein is not warranted to be correct or applicable in any way since laws may have been misinterpreted herein, since laws change from time to time, and since the impact of those laws on any particular situation varies. The information presented in this site shall not be construed to be formal legal advice nor the formation of an attorney-client relationship. Persons accessing this response are encouraged to seek independent legal counsel in their jurisdiction for guidance regarding their individual circumstances. Do not take any action or inaction based on information presented herein since it is informational and may not be accurate or applicable to you; it merely attempts to give you a basis of knowledge to help you formulate questions to ask a legal or other professional in a face-to-face meeting in your jurisdiction. Joseph Ross does not hold himself out to be a specialist or expert in any area, regardless of assertions made by any third party, and any implication of being an expert or specialist herein is made in error. I hope the information presented above is useful to you. Answer above is (c) Joseph Ross. All rights reserved.
JoeLawyer
JoeLawyer, Attorney
Category: Bankruptcy Law
Satisfied Customers: 767
Experience: Attorney in the practice of Bankruptcy Law since 1996
Verified
JoeLawyer and 87 other Bankruptcy Law Specialists are ready to help you
Ask your own question now
Ask JoeLawyer Your Own Question
JoeLawyer
JoeLawyer
JoeLawyer, Attorney
Category: Bankruptcy Law
Satisfied Customers: 767
767 Satisfied Customers
Experience: Attorney in the practice of Bankruptcy Law since 1996

JoeLawyer is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises!

Gary B.Edmond, OK

My Expert was fast and seemed to have the answer to my taser question at the tips of her fingers. Communication was excellent. I left feeling confident in her answer.

EricRedwood City, CA

I am very pleased with JustAnswer as a place to go for divorce or criminal law knowledge and insight.

MichaelWichita, KS

PaulMJD helped me with questions I had regarding an urgent legal matter. His answers were excellent.

Three H.Houston, TX

Anne was extremely helpful. Her information put me in the right direction for action that kept me legal, possible saving me a ton of money in the future. Thank you again, Anne!!

ElaineAtlanta, GA

It worked great. I had the facts and I presented them to my ex-landlord and she folded and returned my deposit. The 50 bucks I spent with you solved my problem.

TonyApopka, FL

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

< Previous | Next >

Meet the Experts:

Terry L.

Terry L.

Attorney

2,679 satisfied customers

Better Business Bureau. 18yrs bankruptcy experience. Chicago Bar Assoc. American Bankruptcy Institute member.

cortrightlaw

cortrightlaw

Attorney

511 satisfied customers

Attorney practicing Bankruptcy Law including Chapter 7, Chapter 11, Chapter 12, and Chapter 13.

JoeLawyer

JoeLawyer

Attorney

767 satisfied customers

Attorney in the practice of Bankruptcy Law since 1996

A.J.

A.J.

Attorney

262 satisfied customers

Experienced consumer bankruptcy attorney.

Fritz

Fritz

Attorney

209 satisfied customers

Florida attorney with extensive experience in Chapter 7 and Chapter 13 consumer bankruptcy cases

Law Girl

Law Girl

Attorney

153 satisfied customers

I am an attorney.

Paul K, Esq.

Paul K, Esq.

Attorney

141 satisfied customers

10 years Exp., Great customer service, Prompt responses.

< Previous | Next >

Related Bankruptcy Law Questions
Received a notice of automatic dismissal without the entry
Received a notice of automatic dismissal without the entry of a discharge. for failure to file documents. a/b, D, E/F,I,J,J2,statement of your current monthly, income BUT I filed these forms but at 2 … read more
DrakeLAW
DrakeLAW
Juris Doctorate
984 satisfied customers
Law Educator I am attaching my rough draft to the trustee
Law Educator I am attaching my rough draft to the trustee -please advise in your professional opinion if there is something that needs to be deleted or added. Also, I am attaching the minute entry to … read more
PaulmoJD
PaulmoJD
Attorney At Law
Doctoral Degree
106 satisfied customers
If the trustee rules that the person filing for bankruptcy
If the trustee rules that the person filing for bankruptcy has an equitable interest in real estate, can that ruling interfere with his exemption. Or is he allowed then to file for his right of redemp… read more
DrakeLAW
DrakeLAW
Juris Doctorate
984 satisfied customers
I had a hearing in bankruptcy court- does this mean I wasn't
I had a hearing in bankruptcy court- does this mean I wasn't supposed to defend myself against the one who called for the hearing?… read more
PaulmoJD
PaulmoJD
Attorney At Law
Doctoral Degree
106 satisfied customers
I filed a chapter 13 bankruptcy petition in 2012. It was
I filed a chapter 13 bankruptcy petition in 2012. It was converted to a chapter 7 and I received a discharge of debt under USC 727. In 2016 I filed another chapter 13, and the same creditors who didn'… read more
PaulmoJD
PaulmoJD
Attorney At Law
Doctoral Degree
106 satisfied customers
If you have a trial scheduled and the US Trustees Office is
If you have a trial scheduled and the US Trustees Office is trying to get your case dismissed and you have been dealing with your attorney who has been doing things that will get him disbarred, how do… read more
Michael Bradley
Michael Bradley
JD
1,193 satisfied customers
I filed a Chapter 13 petition in 2012 which was converted to
I filed a Chapter 13 petition in 2012 which was converted to Chapter 7 and I received a discharge in 2015. While a case was still opened I filed a another 13 in 2016. The same alleged secured creditor… read more
socrateaser
socrateaser
1,031 satisfied customers
Rule 1009 all petitions, lists and scheduled statements and
Rule 1009 all petitions, lists and scheduled statements and admendments should be verified or contain unsworn delcaration to filed what is this… read more
Ray
Ray
Lawyer
Doctoral Degree
30,914 satisfied customers
Files his Chapter 7 petition and fails to include a creditor
John files his Chapter 7 petition and fails to include a creditor whom he borrowed $5K from for an educational loan. He wants to amend his petition to include the creditor before his creditors meeting… read more
Terry L.
Terry L.
Attorney
Doctoral Degree
2,679 satisfied customers
I filed a volunteer chapter 13 bankruptcy petition. I
I filed a volunteer chapter 13 bankruptcy petition. I converted my petition to a chapter 11. I was later converted to a chapter 7 by the bankruptcy court. It was a asset liquidation case which consist… read more
DrakeLAW
DrakeLAW
Juris Doctorate
984 satisfied customers
I filed a chapter 13 bankruptcy petition in the district of
I filed a chapter 13 bankruptcy petition in the district of Connecticut. It was converted to asset case under chapter 7. The trustee filed a "notice of pendency of bankruptcy case" on the land records… read more
PaulmoJD
PaulmoJD
Attorney At Law
Doctoral Degree
106 satisfied customers
I received a letter from the united states bankruptcy court
i received a letter from the united states bankruptcy court southern district of new york … read more
Barrister
Barrister
Attorney/Landlord/Realtor
Doctoral Degree
35,389 satisfied customers
I have hard evidence that the Trustee and Trustee atty were
Hello - I have hard evidence that the Trustee and Trustee atty were negligent, breached their fiduciary duties and allowed my federal case of fraud in the inducement run the SOL, without pursuing as t… read more
Dwayne B.
Dwayne B.
Juris Doctor
28,693 satisfied customers
The Trustee in a corporate bankruptcy case erased and/ or
The Trustee in a corporate bankruptcy case erased and/ or deleted tape recorded testimony of a key witness in a 2004 bankruptcy rule deposition. what recourse do I have being that witnesses testimony … read more
Legal Eagle
Legal Eagle
Attorney
Doctoral Degree
7,403 satisfied customers
Not a duplicate** Must a creditor petition the bankruptcy
Not a duplicate**Must a creditor petition the bankruptcy court to pursue a judgment lien for post-petition debt/arrears? Are they violating the automatic stay if they do not get permission from the ba… read more
Maverick
Maverick
Doctoral Degree
6,134 satisfied customers
I NEED TO FILE A PETITION IN A BANKRUPTCY CASE. I don't know
I NEED TO FILE A PETITION IN A BANKRUPTCY CASE. I don't know if I'll need a lawyer or not. I am a creditor and I sold my business to another person 21/2 yrs ago. She has several creditors but the othe… read more
socrateaser
socrateaser
1,031 satisfied customers
Bankruptcy court trial hearing Brief needed. I am a
Bankruptcy court trial hearing Brief needed. I am a Creditor, already finished a Rule 2004 exam on Debtor, out of court. I must file brief and exhibits by this Friday.… read more
PaulmoJD
PaulmoJD
Attorney At Law
Doctoral Degree
106 satisfied customers
I received notice from the Trustee of an "Order Striking
I received notice from the Trustee of an "Order Striking Filing For Failure To Comply With Required Procedures".I believe the problem is with a creditor who had an undeliverable address, however, I ha… read more
DrakeLAW
DrakeLAW
Juris Doctorate
984 satisfied customers

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).

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).

Show MoreShow Less

Ask Your Question

x