Can I force a company into bankruptcy for a debt claim against it?

[overtonj]

What is the name of your state? Georgia

I am working in a company with an owner, who won't work or put in any money. I'll call the company, "Innova". The owner is currently the sole shareholder. I will vest 10% of the shares as of 7/31/06. Innova has been underfunded as a result of the owner's unwillingness to contribute. Now, I am having to close operations and submit my debt claim. The company does not have the money to pay the debt and has no assets, except an exclusive license agreement from a patent company.

Can I sue Innova and force them to either pay the debt, or liquidate the license agreement? Will they have the option to simply refuse to pay, then dissolve the company while avoiding the loss of the license agreement?

 

[Ladynred]

You can sue anyone you please. If the company has no funds and no assets they may indeed file for bankruptcy protection. Depending on what Chapter is filed, you may or may not get any money. Sounds like you need to consult with an attorney.

 

[GaAtty]

It does not sound like the company will file bankruptcy. It is expensive to file a Chapter 11, and the company has to show the trustee that they have a business plan that will result in profitability eventually. It does not sound like this company has the cash to pay even the filing fee, much less the attorney's fees. It also does not sound like this company can put together a business plan that will show that the company can pay their creditors eventually. It sounds like you have stock that is worth what Enron stock is worth. I do have a better idea for your collection, however, and that is that you sue not only the company but the owner. This is based on the supposition that the owner is a sloppy bookeeper and has not correctly kept his personal finances separate from the corporation finances, therefore you can "pierce the corporate veil" and go after the owner personally for the debt. In other words, the owner may have used the corporation as his "alter ego", and the company debts are really his debts. It only takes one incident of the owner using the company to pay his personal debts in order to pierce the veil. You can subpoena the bank records (unless you can get them another way), and see if he has used it for his personal debts. If so, you can probably sue him and the company both in the same suit, and collect against either or both. An attorney would probably need to help you with this.