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Ask Tina Your Own Question
Tina, Lawyer
Category: Legal
Satisfied Customers: 8775
Experience:  JD, BBA Over 25 years legal and business experience.
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I have an issue I was hoping you could help me with and have

Customer Question

I have an issue I was hoping you could help me with and have two questions.
First off, can I shut down an llc and establish a new one to avoid a potential lawsuit? We really don't have assets, and don't have money to cover the suit or legal fees if sued.
Here's the issue. We're a development firm (3 people, in business for 11 trouble free years). We engaged with a client for a $30k site with payments to be made in three installments, 10k to start 10k in the middle and 10k to deliver. It was supposed to take three months. We completed the site (and they were pleased with it), except one section of the site required a complicated migration (~30k files) from one platform to another. This was unexpected and became a problem that required a very time intensive manual migration that took months and incurred a huge cost on our end that we did not pass on to the client. We were in constant contact with the company with frequent updates of progress, we had team members tell us they understood the issue, we even had a call with the main technology guy just weeks before the end where he basically said he knows how difficult the task was. Only the owner ever showed frustration. We have an extensive email trail documenting our meticulous communication. We finally finished the site, and sent an email explaining this, and received a reply back saying that they had sent us an email and a letter stating that they've terminated our relationship. Unfortunately, the email went to my junk mail and the letter came in the mail several days later. At this point we had accepted two payments ~$20k. We sent another letter saying that the site was complete and we will deliver it after the invoices are paid. They said they are not paying and they don't want it and that we should have stopped working on it. We (two partners and a third party) then had a call with the owner to try and rectify the situation. In short, they said "our relationship is terminated, and they suggest we end it amicably (they don't come after us and we don't pursue the remaining $10k) so no reputations are destroyed" and then requested/instructed us to "destroy" their files. We obviously didn't destroy the files, but terminated the relationship as requested, despite that we were owed money, and in our opinion, the relationship was not terminated with enough notice. But we were fine with it. It's been about a year since that call, and we've had no communication with them since. However, I just noticed they have a new site (with some design elements we developed, btw), and I am now afraid they will come after us. I'm worried that she will come after us since we never provided them with a deliverable, though she never requested it. My question is... How liable are we, if at all. What can I do to protect the business? Can/should we dissolve the LLC and start a new one? We have an 11 year reputation to uphold, and this is our livelihood. I'm worried.
Submitted: 1 year ago.
Category: Legal
Expert:  Irwin Law replied 1 year ago.

The way you explain the situation, it appears that they owe you money, not the other way around.. Why are you afraid of them coming after you? What would they have to gain by doing that? There doesn't appear to be enough money involved in the whole transaction to warrant a Complicated lawsuit with lawyers charging $4-$500 per hour.