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If my company is going to be filed for a $100,000 lawsuit,

and we are in no...
If my company is going to be filed for a $100,000 lawsuit, and we are in no standing whatsoever to even settle for half that amount, would the best option be to file a corporate bankruptcy to discharge the debt and dissolve the company?
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Answered in 5 minutes by:
7/16/2013
WALLSTREETESQ
WALLSTREETESQ, Attorney
Category: Bankruptcy Law
Satisfied Customers: 17,253
Experience: 14 years exp., CH 7 AND 13 Bankruptcy cases, AFL-CIO UNION PLUS, UFT NYSID AND ALL MAJOR UNIONS
Verified

WALLSTREETESQ :

Hello I am a licensed attorney here to help you with your question, please review my response and do not hesitate to ask for clarificati on

WALLSTREETESQ :

This is a common situation, if the potential judgment will only be on the corporation, you can file a corporate bankruptcy,

WALLSTREETESQ :

or just leave corporation, and close all accounts, and start a new corp to run your business,

WALLSTREETESQ :

a bankruptcy would not even be needed, if you plan on closing the current corp.

Customer:

It's a LLC, but I assume it's all relative since it's not a sole proprietorship?

WALLSTREETESQ :

yes,

Customer:

On the final page of the contract where we signed, it says "Signed for by and on behalf of X (the company name)

WALLSTREETESQ :

an LLC is a corporation, and you can dissolve it and let the creditors go after the LLC assets, if the corp has no assets, you can let the judgment remain, and start a new corp

Customer:

And then I signed my name on the other side

Customer:

We did a licensing deal with Justin Biebers merchandise group out of New York

Customer:

Paid $100,000 upfront

Customer:

and we had a 2nd installment of $100,000

Customer:

But due to the retailers no longer wanting to carry Justins merchandise because he is an idiot we could not secure sufficient PO's, and could not pay 2nd installment

WALLSTREETESQ :

If you are personally liable you would be named in the suit,

Customer:

I havent received the law suit yet, I received a letter from their attorney today

WALLSTREETESQ :

and if you are a corp bankruptcy would not help,

WALLSTREETESQ :

you could wait for the lawsuit,

WALLSTREETESQ :

or have a local attorney review the contract signed,

WALLSTREETESQ :

it would be easier to let the old corp go, and start a new corp for the business

Customer:

Why wouldnt bankruptcy not help?

WALLSTREETESQ :

it would help by discharging the debt,

Customer:

I am just concerned about this affecting my personal

Customer:

and financial well being

WALLSTREETESQ :

however it would not remove any personal liability

WALLSTREETESQ :

you can only be personally liable if you signed as a guarantee

Customer:

How could they make me personally liable?

Customer:

The contract was with WallCelebrity, LLC

Customer:

Not my name?

WALLSTREETESQ :

then you are fine,

WALLSTREETESQ :

You can file a chapter 7 for the LLC,

WALLSTREETESQ :

or leave the LLC and and have the creditors go after the LLC assets only,

WALLSTREETESQ :

you would be protected

Customer:

Ok

Customer:

They are totally trying to f**k me because they already made off with $100,000

Customer:

And because Justin ruined his image no retailers are taking on new vendors, so we cant pay

Customer:

Because we cant collect orders

Customer:

Do i need to go to court and go through that whole circus or can I just get a default judgement and file bankruptcy?

WALLSTREETESQ :

you can let them get a judgment and save legal fees,

WALLSTREETESQ :

and time,

WALLSTREETESQ :

or you can file an answer, and that would delay the suit for several months,

Customer:

What good would filing an answer do?

WALLSTREETESQ :

it would delay the judgment,

Customer:

If you were in my position, I invested all my money into this business, I am the only officer, it's my company only, I have no money really at all because of this and have been working on a new project under a new LLC, what would you do

Customer:

I dont want anything to do with this LLC i dont care if its gone

WALLSTREETESQ :

I would let them obtain a default, and try to collect on the old LLC,

Customer:

And nothing will go on my personal credit report correct

WALLSTREETESQ :

yes

Customer:

Have you ever heard of cases like this

WALLSTREETESQ :

yes, it happens many times,

Customer:

Because on the letterhead and subject of email it reads, "Bravado Merchandise Group V. WallCelebrity"

Customer:

So clearly it sounds like they are coming after the company not my name

Customer:

I dont know why my attorney I called today didnt give me this option of default then bankruptcy

Customer:

Probably because there is no money in it for him

WALLSTREETESQ :

it would be a common tactic,

WALLSTREETESQ :

You should wait till a lawsuit is filed,

WALLSTREETESQ :

and see if you are named in the suit,

WALLSTREETESQ :

if not I would let it go

Customer:

Why/How could they name me in the suit?

WALLSTREETESQ :

I am stating you should wait I have not seen the contract you signed,

WALLSTREETESQ :

you may have been a personal gaurantee

Customer:

Can I email you a picture and you can give me your opinion

WALLSTREETESQ :

yes

Customer:

I will email you the 14 page contract it is not a lot to read, skip to the part you are looking for and if you could let me know i would appreciate it

Customer:

What is your email

Customer:

You dont need to read the whole document, just what you are looking for

WALLSTREETESQ :

you would have to put it in another question, after you accept this

WALLSTREETESQ :

you can ask another question and have a picture sent with the question,

Customer:

Well it's a .PDF file

WALLSTREETESQ :

it would be best to copy and paste it

WALLSTREETESQ :

If satisfied with our service please provide us with positive feedback, thank you

Customer:

I will give you excellent service

Customer:

Please see the below

Customer:

THIS AGREEMENT is made as of the day of October, 2012.
BETWEEN
(1) BRAVADO INTERNATIONAL GROUP MERCHANDISING SERVICES, INC at
1755 Broadway, 2nd Floor, New York, NY 10019 ("Bravado"); and
(2) WALL CELEBRITY, LLC at 602 W. North Loop, Austin, TX 78751 Attn: Gianni
Giannulli ("WALL CELEBRITY").
WHEREAS:
(A) Bravado is the du1y authorized licensee of certain merchandising rights relating to the
recording artist known professionally as "Justin Bieber" (hereinafter referred to as "Artist").
(B) Bravado and WALL CELEBRITY have agreed that WALL CELEBRITY shall be granted
certain rights to manufacture and sell certain goods and merchandise incorporating, inter alia
the name(s) and/or likeness(es) of the Artist for the consideration and upon the terms and
conditions hereinafter set forth.
(C) Words defined in paragraph 14 below shall have the meanings ascribed to them therein.

WALLSTREETESQ :

it only states the corp

Customer:

AS WITNESS the hands of the duly authorized representatives of the Bravado and the WALL
CELEBRITY the day and year first above written
SIGNED by
for and on behalf of
BRAVADO INTERNATIONAL GROUP
MERCHANDISING SERVICES INC
SIGNED by
for and on behalf of
WALL CELEBRITY, LLC
Bender/Wall Celebrity/Justin Bieber 14
)
)
)
)

Customer:

I signed my name after the Signed By

Customer:

But I dont think that would have any bearing on me being liable beyond the corp?

WALLSTREETESQ :

you will not be personally liable,

WALLSTREETESQ :

you signed as an agent or officer of the llc

Customer:

Ok thank you sir

WALLSTREETESQ
WALLSTREETESQ, Attorney
Category: Bankruptcy Law
Satisfied Customers: 17,253
Experience: 14 years exp., CH 7 AND 13 Bankruptcy cases, AFL-CIO UNION PLUS, UFT NYSID AND ALL MAJOR UNIONS
Verified
WALLSTREETESQ and 87 other Bankruptcy Law Specialists are ready to help you
Ask your own question now
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WALLSTREETESQ
WALLSTREETESQ
WALLSTREETESQ, Attorney
Category: Bankruptcy Law
Satisfied Customers: 17,253
17,253 Satisfied Customers
Experience: 14 years exp., CH 7 AND 13 Bankruptcy cases, AFL-CIO UNION PLUS, UFT NYSID AND ALL MAJOR UNIONS

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