closed s corp issues

[kk360]

What is the name of your state? WA


I closed a S-corp, sold off all assets, still owe employees and creditors money. There is no more $. I dont have any debts that were personally guareenteed. One of the employee's is threating to sue. Should I ,can I, file chap 7 for the business?

 

[jdmba]

If you knew creditors and employees couldn't be paid, it was not wise to sell off the assets.

Were there any liens on the assets that you sold? How long ago were they sold? What happened to the money from the sale? Were you the only shareholder? Were you the only officer of the corp?

Depending on the answers to those questions (and many others), the sale could be considered a fraudulent conveyance. You could also be held personally liable regardless of the fact that you didn't personally guarantee any of the debts. I'm not saying that will happen here, however, since you shared very few relevant facts...instead I'm just throwing out the possibility as something to consider as a worst case scenario.

If I were you, I'd seek the advice of a bankruptcy attorney with experience in dealing with businesses. Your issue is really too complicated to be effectively addressed in here.