What is the name of your state (only U.S. law)?
Ohio
I have been in business for 20 years. We have been a successful business with our shares of ups and downs throughout the years. Two years ago we had a great project that produced some substantial income for the company.
Unfortuneately, we missed that this was a prevailing wage project - partially the fault of the company we were hired by, and ended up underpaying some of our employees. After consulting with a labor attorney, we found that rate they should have been paid (difference of .90/hr) and issued back pay to all of them. However, one of them was not happy with this and without my knowledge reported me to the state.
The state came after me and audited my records and said we owed an additional $60K to my employees and they were charging me a 25% fine. They made us go by union wages and classify my employees in a tier that we were not familiar with. Anyway ..long story short...this has been a devastating blow to my company. I have done the best I can to survive this, but with the sluggish economy, our sales have been low too. We are currently 100K in the red on our balance sheet and I owe the bank 350K on my line of credit. I have receivables of about $250K right now. I don't see any large projects until late fall-early winter.
I am so worried that I am putting my assets are risk here. Every day I stay in business, I think, well there goes a little more of my house. We have a personal guarantee with the bank, so I do have personal assets at risk here.
When do I make the decision to just close up shop and cut my losses? What are my options as a C-Corp? I am not forced to file bankruptcy yet, but I'm thinking I may have to do this, to avoid any further loss of my assets.
Any advice on what I should do? Thanks!
Ohio
I have been in business for 20 years. We have been a successful business with our shares of ups and downs throughout the years. Two years ago we had a great project that produced some substantial income for the company.
Unfortuneately, we missed that this was a prevailing wage project - partially the fault of the company we were hired by, and ended up underpaying some of our employees. After consulting with a labor attorney, we found that rate they should have been paid (difference of .90/hr) and issued back pay to all of them. However, one of them was not happy with this and without my knowledge reported me to the state.
The state came after me and audited my records and said we owed an additional $60K to my employees and they were charging me a 25% fine. They made us go by union wages and classify my employees in a tier that we were not familiar with. Anyway ..long story short...this has been a devastating blow to my company. I have done the best I can to survive this, but with the sluggish economy, our sales have been low too. We are currently 100K in the red on our balance sheet and I owe the bank 350K on my line of credit. I have receivables of about $250K right now. I don't see any large projects until late fall-early winter.
I am so worried that I am putting my assets are risk here. Every day I stay in business, I think, well there goes a little more of my house. We have a personal guarantee with the bank, so I do have personal assets at risk here.
When do I make the decision to just close up shop and cut my losses? What are my options as a C-Corp? I am not forced to file bankruptcy yet, but I'm thinking I may have to do this, to avoid any further loss of my assets.
Any advice on what I should do? Thanks!