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4/1/2013
Andrea, Esq.
Andrea, Esq., Attorney
Category: Legal
Satisfied Customers: 12,554
Experience: 25 yrs. experience in family law, estates, real estate, business law, criminal defense, immigration, and employment law.
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Hi, Welcome to JustAnswer, My name is XXXXX XXXXX my goal is to provide you with Excellent Service,

 

 

What question may I Answer for you this evening ?

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Customer reply replied 4 years ago

I formed an LLC company with my wife in Washington State, in 2007. Our clients are in Environmental Science and Regional Planning. Many of our clients are Indian Tribes, but also include states, counties, and federal agencies. I hold a doctorate in Environmental Science and Regional Planning.


In 2011 we took a contract with an Indian Tribe to develop some software and signed a contract that was "messy" in terms of specifically stating expectations. Under US Copyright law I retained the Copyright to the source code of the program. The Tribe disagrees and has been trying to acquire the copyright for themselves. They do not possess any of the source code as it was never installed on their computers. Under the contract, it was installed on my servers and made available as a SaaS solution.


Long story, but in February I could see that the Tribe desires to extend the dispute and worked to increase our copyright attorney fees to bankrupt the company (we are small).


We closed the company with the state in February 2013. The Tribe recently sent me a threatening letter demanding the source code and a programmer's guide to it (never detailed in the contract we signed). Otherwise, all conditions of the contract were completed by my company.


 


Our fears are now that as the copyright owner (me personally - registered with the US Copyright office) can the Tribe sue me personally and take our personal bank accounts, house, and all other assets? I feel that since it was an LLC that there is a "liability wall" protecting me. What do you say??

Good Evening, William, Thank you for your question,

 

 

If you conducted business with the tribe through your LLC, then the tribe would have to sue the LLC because it has no "privity of contract" with you which is a prerequisite to suing you. If the tribe sues you, you should show the contract and all other paperwork proving that all transactions were with the LLC and their lawsuit was filed against the wrong party and ask that the Court dismiss the lawsuit against you personally. After all, protecting one's personal assets is the primary reason one forms an LLC. The fact that the LLC was forced to fold does not give the tribe the legal right to sue you personally,

 

 

If I have not Answered your question fully, please let me know by using the "Reply" button and I will be glad to explain further,

Please be kind enough to rate my service to you as "Excellent Service", If you are given a survey, please be kind enough to leave some Positive Feedback, I would appreciate it greatly,

 

Thank you for allowing me the opportunity to assist you,



ANDREA

Andrea, Esq.
Andrea, Esq., Attorney
Category: Legal
Satisfied Customers: 12,554
Experience: 25 yrs. experience in family law, estates, real estate, business law, criminal defense, immigration, and employment law.
Verified
Andrea, Esq. and 87 other Legal Specialists are ready to help you
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Customer reply replied 4 years ago

Thank you for that response. I understand, and you verified, that they cannot sue me personally, but can they "sue the company that was dissolved on February 6, 2013?" Is there any way they can go after our assets ?


Is there any way they can make financial claims against us? They claim non-completion of one of the contracts we had with them when the company was closed. They were stonewalling our efforts on the second contract so we completed it as best we could, and based on that they owe us about $17K, but I am prepared to walk away from that collection - since the company was closed.

They cannot go after your personal assets. And, if the LLC was dissolved and no longer exists, they could not sue the LLC, either,

 

 

If I have not Answered your question fully, please let me know by using the "Reply" button and I will be glad to explain further,

Please be kind enough to rate my service to you as "Excellent Service", If you are given a survey, please be kind enough to leave some Positive Feedback, I would appreciate it greatly,

 

Thank you for allowing me the opportunity to assist you,



ANDREA

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Customer reply replied 4 years ago

I like your quick and complete responses. Thank you.


I will extend the question to address our position since closing the first company. We opened two new LLCs with new members, and business structure. The assets of the old company were 'dissolved' and some transferred to a "holding LLC".


Can the tribe go after any of the new business structures, or did their options end with the closure of the old LLC?

Customer reply replied 4 years ago

It appears that the session 'closed'?


I was hoping for the answer to the previous question, and one last confirmation. (by the way your service has been EXCELLENT!)


 


One more question: I received a formal letter from their attorney which could be qualified as an ultimatum demanding an immediate delivery of the program’s source code. I have prepared a two page response to their demanding letter, but I would like your opinion of if I should even respond to their letter or simply ignore it. My letter is a brief restatement of our position. Our copyright attorney’s correspondence with their copyright attorney (spanning 4 months) did not lead to any resolution of the dispute. The dispute did not escalate into a court case at the time we closed the company.

The tribe can only sue the entity with which it was doing business. However, if the tribe can prove that either of the two new LLC's was a "successor" LLC to the original LLC with which they were doing business, then if they sued the "successor" LLC, proved that, in fact, it was a "successor" LLC and if they won the lawsuit, they could go after the assets of the new LLC.

 

If your attorney has been corresponding with their attorney, I would not send any letter to them directly from you. Either give it to your attorney to respond or do not respond to them personally at all

 


Please be kind enough to rate my service to you as "Excellent Service", otherwise I will not receive credit for assisting you,

 

 

If you are given a survey, please be kind enough to leave some Positive Feedback, I would appreciate it greatly,

 

Thank you for allowing me the opportunity to assist you,



ANDREA

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Customer reply replied 4 years ago

Can you detail for me the definition of the "successor LLC" in these terms? In the respect that I am doing the same type of business in the new LLC as I did in the old one, how would they 'prove it'?

Customer reply replied 4 years ago

Any ideas on how I protect myself in this 'successor company'?

I do not have all the surrounding facts and circumstances to be able to say how they would prove it.

 

However, a "successor" LLC would be an entity which took over some, or all of the assets of the dissolved LLC, it engaged in some or all of the business activities as the predecessor LLC, and some or all of the owners of the "successor" LLC were the same as the predecessor LLC which was dissolved,

 

 

If I have not Answered your question fully, please let me know by using the "Reply" button and I will be glad to explain further,

Please be kind enough to rate my service to you as "Excellent Service", If you are given a survey, please be kind enough to leave some Positive Feedback, I would appreciate it greatly,

 

Thank you for allowing me the opportunity to assist you,



ANDREA

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Customer reply replied 4 years ago

Does that mean that because of their claim against my copyright ownership in the program that I cannot do business anymore and operate my own company without fearing their attack against me?


Does it mean that they will successfully succeed to drag me into court which I will not be able to afford financially, or for health reasons?

1. You can still do business, just make sure that there is enough distance between new LLC's and the dissolved LLC; by "distance" I mean that new LLC's should not have the characteristics which I described in my previous Answer;

 

 

2. We live in a very litigious society where anybody will sue anybody at the drop of a hat. However, filing a lawsuit against someone does not necessarily mean that they will win. Therefore, if you are sued, be sure you claim your attorneys' fees when the plaintiff loses its lawsuit,

Please be kind enough to rate my service to you as "Excellent Service",

If you are given a survey, please be kind enough to leave some Positive Feedback, I would appreciate it greatly,

 

Thank you for allowing me the opportunity to assist you,



ANDREA

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Customer reply replied 4 years ago

What if I cannot afford to defend myself in their court battles? I cannot afford to put up a defense so getting attorney fees would not mean much.

Customer reply replied 4 years ago

If I take my name, and my wife's name off the new LLC companies, and do my business activities as an employee, would that be sufficient distance fir the new LLCs not to be a successor to accomplish what you have recommended?

If they could trace the assets of the dissolved LLC to the new LLC and the activities of the new LLC were substantially the same as the dissolved LLC, that might still give them a "foot in the door".

 

There is never a guarantee that one entity will not sue another entity; and, I know how expensive attorneys are because if I ever find myself in a position to sue someone or I am sued, I retain an attorney, I never represent myself. I am a firm believer in Abraham Lincoln's saying, "He who represents himself has a fool for a client"

 

 

 

Please be kind enough to rate my service to you as "Excellent Service", If you are given a survey, please be kind enough to leave some Positive Feedback, I would appreciate it greatly,

 

Thank you for allowing me the opportunity to assist you,



ANDREA

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Andrea, Esq.
Andrea, Esq.
Andrea, Esq., Attorney
Category: Legal
Satisfied Customers: 12,554
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Experience: 25 yrs. experience in family law, estates, real estate, business law, criminal defense, immigration, and employment law.

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