How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Loren Your Own Question
Loren, Attorney
Category: Business Law
Satisfied Customers: 33540
Experience:  30 years experience representing clients .
Type Your Business Law Question Here...
Loren is online now
A new question is answered every 9 seconds

I have a rather long question, I will try to be brief. I am the Presi

Customer Question

I have a rather long question, I will try to be brief.
I am the President of a corporation that sold its assets to another company in may 2013. Our corporation borrowed some money from 2 private investors. I signed the agreement for our corporation as President. Since that time things have gone sour, I personally have been paying the quartely interest to them. One of the investors passed away and the estate is demanding full payment of their investment of $15,000 to them. The corporation is broke. Bot***** *****ne where do I stand, I have been trying to do the right thing and pay, but now that they desire the loan in full to be paid, I am tapped out in trying to borrow the funds from any lending facility. Frankly no one will loan me any funds due to the my credit has been shot. The investor has given me two weeks to pay, she said she has talked to an attorney and and told my wife that this is going to involve her if this goes legal. There is a promisary note the corporation signed with them. I know you would need to see a copy of this. Please advise me of my options. Tommy Sangster
Submitted: 1 year ago.
Category: Business Law
Expert:  Loren replied 1 year ago.
Good morning. I am Loren, a licensed attorney, and I look forward to assisting you.
Expert:  Loren replied 1 year ago.
Did you sign any personal guarantees? Were the loans secured by any of the assets sold off?
Expert:  Loren replied 1 year ago.
Are you online with me?
Customer: replied 1 year ago.

No, I didn't sign any personal guarantees, although there is a clause in the note stating binding agreement for all successors, heirs, and such. That is concerning me. It is not that I am trying to not pay, I can't pay. I am unable to get a loan to pay the estate the money they want for their passed away husband. To make matters worse, this is a family friend of my father that has passed away, The business is a family business of my fathers, I am President, He was CEO, mother involved, sister involved, you know the typical family business. So this where I am at the moment.

Expert:  Loren replied 1 year ago.
Thank you for the additional information.As a general rule, officers and shareholders are not NOT personally liable for corporate debt. So, if you did not sign any document personally, as opposed to signing in your capacity as a corporate officer, or any document in which you guaranteed the repayment of the corporate debt, then the creditor's sole recourse is to sue the corporation only.
Expert:  Loren replied 1 year ago.
In other words, the creditor has no recourse against you (or your spouse) personally.
Expert:  Loren replied 1 year ago.
They can posture and threaten all they want but, without any signed agreement from you personally, they can only sue the corporation.
Customer: replied 1 year ago.

Yes, I am online I think, I am answering your questions and sending them.

Customer: replied 1 year ago.

Would it benefit me to allow you to look at an copy of the agreement we signed with them.

Expert:  Loren replied 1 year ago.
If you want. However, if you are certain you did not sign personally and did not guaranty the loans, it is not really necessary. You, as a corporate officer, would not have personal liability for corporate debt.
Customer: replied 1 year ago.

The only document I signed was the loan note as President for the corporation. Loren, thanks for your help. How best would you advise me to share with the family when we meet next Tuesday night to discuss this issue, diplomatically.

Expert:  Loren replied 1 year ago.
Apologize for the problem and point out that, you have only signed the note in your capacity as the president, not personally, their sole recourse is against the corporation, which has no assets.
Expert:  Loren replied 1 year ago.
Let them know that anyone can be sued, but if they include you, personally, in an action against the corporation, that count will simply be dismissed.
Expert:  Loren replied 1 year ago.
Did you have further questions? Have I answered your question?
Customer: replied 1 year ago.

I just sent a reply to you but I do not see it, here it is typed again.

Loren, Thank You all your help, If after Tuesday night meeting, I have some more questions are you available and how would I contact you for further discussion on this matter. I belive you have my number, *** *** ****

Customer: replied 1 year ago.

I sent a repy, but did not receive a response, But no I have no further questions, only if after out meeting, I have some questions, How can I contact you.

Expert:  Loren replied 1 year ago.
If you have more questions later then ask for me by name when you post them in JA and I will be notified.
Expert:  Loren replied 1 year ago.
You are very welcome. If you have no further questions, and have not yet done so, please remember to leave a favorable rating (Excellent or Good) so that I am credited for assisting you. A bonus is not required, but is always appreciated.