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Terry L.
Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2890
Experience:  Better Business Bureau. 18yrs bankruptcy experience. Chicago Bar Assoc. American Bankruptcy Institute member.
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A CA corp in which I am the CEO and majority shareholder is

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A CA corp in which I am the CEO and majority shareholder is being sued for breach of contract (default) on a debt. The plaintiff is also suing me personally for Alter Ego liability. If the Corp files chapter 7 bankruptcy does that "stay" the Alter Ego part of the current lawsuit or do I have to continue to defend that section?

Thx

Terry L. :

Hi, thanks for your question. You should hire a lawyer for specific legal advice. No attorney client relationship is created here.

Terry L. :

It would stay it just for a moment, the creditor would likely bring a motion in the bankruptcy case to remove the co-debtor stay or to modify the automatic stay to pursue the other parties to the suit

Terry L. :

So, it would buy you a little time.

Terry L. :

If you filed a personal bankruptcy as well, it would stay the matter for both you and the corp.

Terry L. :

Did you have any questions?

Customer:

I am not a co-debtor on the loan nor did I sign a personal gaurantee.

Terry L. :

Co-, meaning other party to the suit, here, the Alter-Ego.

Terry L. :

The creditor, upon motion, would be allowed to continue to pursue personal liability. If the creditor is on the ball, that motion will be filed shortly after the bankruptcy is filed.

Customer:

The motion would be adjudicated by the BK judge, right? I could oppose that right?

Terry L. :

you could, but if it is just to pursue the other party (you) it will most likely be granted.

Terry L. :

It would be just a motion to modify the automatic stay, not to adjudicate the underlying matter.

Customer:

I understand..........

Customer:

This is a great service.

Terry L. :

Did you have any other questions?

Customer:

No....you are awesome.

Terry L. :

Best of luck to you. Feel free to request me if you have any other questions. Thanks

Terry L. and 4 other Bankruptcy Law Specialists are ready to help you