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Contractor demanding ~ $ k in back payments owed from S - Corp i sold . Can she pierce Corporate Veil ?

Fresno, CA |

a contractor is trying to obtain ~ $ k in back payments owed from a business i once owned . Issue is : I sold the company . Term of sale was no debt followed to new owner . Term of work with contractor was between her and the company ( NOT between her and me personally ) . T Here were NO personal guarantees made . Also , it's been 1 + years , and she's out of state . There no longer exists any entity that owes her money , b / c I dissolved the biz after selling , but can she pierce the corporate veil , and seize my personal assets to get her payment ? Company was an S - Corp .

Attorney Answers 2

Posted

This is going to depend on a lot of factors related to how you operated and the circumstances under which you sold the business. I would advise that you speak to a local business attorney and get into detail with him or her.

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Posted

This requires a very fact-specific analysis of a large number of different factors, including whether corporate formalities were observed. You should consult with a California corporate attorney as soon as possible.

The general trend in recent caselaw is that the corporate veil will only be pierced if it's demonstrated that the corporation was the instrumentality of fraud or other improper conduct. If the facts you relate are true and complete, I think it's very unlikely that a court would pierce the veil.

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