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How can I get a collection on default of an employment & forbearance contract for past salary ? I need a contingency attorney.

Marietta, GA |

I was recruited from Atlanta to work for a corporation in an independent contractor employment contract in Georgia. I did my job but the paychecks stopped after 2 months. They begged me to keep working as the company could not continue without me. I agreed and a Forbearance agreement was signed. The corporation and each of its shareholder owners (4) agreed to WAIVE any future counterclaim or legal challenge for legal action to collect my past due salary and admitted 100% fault of default. The interest on it was 18% and the past due balance of my salary was $26,000 in June, 2011 and I kept working so now it is over $60,000. The corporation was dissolved due to negligence for failure to file annual report and yearly fees. The corporate veil can be pierced and I can sue previous shareholders.

Attorney Answers 4

  1. You learned a hard lesson. Well, you actually have a lot of unanswered questions. Who to pursue. How to pursue. What to pursue. Is there anything to pursue. These are very complex questions that sound simple. You were not an employee but, it sounds like you sort-of were an employee. Your best option may be one that you are not even thinking about. Here's a possibility - you may want to hire an attorney FAST to file an involuntary bankruptcy motion against the company to stop them from pillaging the company's assets.

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  2. The dissolution was not a sudden, unannounced thing. Corporations are not administratively dissolved in Georgia for failure to file & pay for an annual report until they are AT LEAST over one year in arrears, and often not until they are two or even three years behind. (It used to be even longer, but Georgia is tightening up.) Therefore, the person in the corporation who filed the annual reports either (a) deliberately let the corporation expire, or (b) was negligent and/or incompetent. Did they deliberately sucker you? Did they allow the corporation to dissolve deliberately? Did they sign the agreement you refer to only as corporate officers, or as individual guarantors also? Did the corporation have any assets at the time of dissolution? There are corporation by estoppel issues here, and possible causes of action against the officers. Whether you can sue previous shareholders depends on several factors, including but not limited to shareholder liability provisions in the corporation's organizing documents, whether the shareholders also held office, etc., etc. I believe it is highly unlikely that any competent corporate attorney would take such a case on contingency, but you never know. And with only $60,000 now allegedly due, it may not make sense to sue, with the cost of litigation being what it is, and the very real possibility there is not $60,000 in unencumbered assets available even if you won. Chalk it up to experience, and don't sign any more contracts to work for outfits that admit they can't pay you "right now."

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  3. Even if you had a slam-dunk case on liability - and there is rarely such a thing - the bigger issue may be the ability to collect any judgment entered in your favor. As a practical matter, therefore, it may be very difficult to find an attorney willing to take your case on a contingency basis, as this is generally only done in cases in which there is a reasonable likelihood of the client getting paid. Otherwise, the attorney is essentially agreeing to work for free, which you have likely learned is not wise. You may have better luck looking for an experienced attorney that will agree to take your case at an hourly rate, perhaps at a reduced rate plus a portion of any recovery that you obtain. Good luck.

  4. Whenever I have represented an individual suing a company or its owners, I inquired into whether the defendants likely had assets to settle or satisfy a judgment. I also had to review the contracts to see if they were enforceable. If those are all good, then it may be worthwhile for you to pursue and an attorney to take some risk. However, there are court costs, court reporters, and other things which have to be paid to pursue the case. There are indeed attorneys who try to collect on contingency, but usually it has to be easy money.

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