My name is Steven, I am the CEO of a failing flooring store. We became an S. Corp 1-1/2007 after our first five years as a sole prop. This year has been a horrible one we have had a number of jobs get completed that we simply cannaot collect on and had a verbal agreement with a huge company to purchase displays for there members to use and well we got stuck to make a long story short Im in debt approx $65K but with approx $30K to one distibuter alone I have decided it is time to close the business I donot wish to dissolve the business mainly becouse I still have pending law suites for approx $50K that we would like to still try and collect on. Anyways I recieved a call from the distibuters attorney yesterday saying they were gonna sue me and if I had the money I explained to him that if by chance I had the money I woudnt be closing our doors he then asked about my personel assests I told him we were incorparated and he then told me they had a personel guarentee from when I had first opened the account as a Sole prop and that since I never sent them a letter resinding that fact that my personel assest were up for grabs as well. I told him my current lawyer said I was ok and had nothing to worry about and he said my lawyer was giving me bad legal advice said he would see me in court and hung up the phone,
After I was bale to get my breath back I picked up the phone and spoke with my attorney these are the questions he asked me.
1. Did I sign the personl guarentee
A. Yes approx 5 years ago
2.Did I notify them that I was Incorarated
A. Yes I sent them letters with new EIN number as well as copys of articles of incororation
3.Did they keep my account number the same and or change the billing name on my invoices
A. Yes they kept account number the same , No they did not change name on invoices.
4.Was any of the 30K debt incuredd as a sole prop
A. No sir this is all with in the last 120 days
5. And you sent them the letter with new EIN, & copy of incorporation
A. Again yes
My lawyer then told me I was on solid ground if I notified them like I did and they still chose to business with me as a Corporation and all this debt was incured as a corp I was on solid ground, he then asked me if any of the other distributers changed my account numbers or invoices and I said that yes one of them had changed the name to include the Inc at the of it but my account number stayed the same. He then again stated I was safe and when I got served that i was to bring him the papers.
I then spoke with my wife who is not the fondest of this attorney and she said I better get a second opionin becouse he had lost a prevoius case for us before when he said we were safe
so I am asking for that second opionion what do I do and just how safe am I ????
I have 5 children and we dont have much but what we have we most def cannot afford to lose
thank you
After I was bale to get my breath back I picked up the phone and spoke with my attorney these are the questions he asked me.
1. Did I sign the personl guarentee
A. Yes approx 5 years ago
2.Did I notify them that I was Incorarated
A. Yes I sent them letters with new EIN number as well as copys of articles of incororation
3.Did they keep my account number the same and or change the billing name on my invoices
A. Yes they kept account number the same , No they did not change name on invoices.
4.Was any of the 30K debt incuredd as a sole prop
A. No sir this is all with in the last 120 days
5. And you sent them the letter with new EIN, & copy of incorporation
A. Again yes
My lawyer then told me I was on solid ground if I notified them like I did and they still chose to business with me as a Corporation and all this debt was incured as a corp I was on solid ground, he then asked me if any of the other distributers changed my account numbers or invoices and I said that yes one of them had changed the name to include the Inc at the of it but my account number stayed the same. He then again stated I was safe and when I got served that i was to bring him the papers.
I then spoke with my wife who is not the fondest of this attorney and she said I better get a second opionin becouse he had lost a prevoius case for us before when he said we were safe
so I am asking for that second opionion what do I do and just how safe am I ????I have 5 children and we dont have much but what we have we most def cannot afford to lose
thank you
