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I was sued by a corporation for breach of contract, and I lost. This was years ago. Now the corporation is defunct, it went out

Los Angeles, CA |
Filed under: Business

of business and its status at the Secretary of State was "suspended". So I reserved the name and paid to renew it, and now own the corporation - at least I have the legal right to the name since they dumped it. So now, I am going to settle the debt with the corporation, for a nominal amount and file satisfaction with the court and then remove the abstracts from title. Any problem?

Attorney Answers 5


  1. Best answer

    I appreciate the craftiness you've exuded, but like others have so eloquently stated, this doesn't get you out of the woods. If the status of the account is a true reflection of the company going out of business, this would suggest that you're not likely going to have a problem, but there is a remote chance that the company (provided it's still a company or has transferred the judgment to another company by way of corporate event, e.g. merger) can still come after you until the judgment is no longer enforceable.

    Your corporation is not the same as the one that obtained the judgment against you. However, based on the account status, it's possible that the company that sued you is no longer a going concern and incapable of coming after you, again, possible, not certain.

    Another point of fact is that if this "suspended" status is by their inadvertent mistake, you may have just created a reason for the company to renew its efforts to pursue you, again a possibility.

    Only time will tell for certain. I appreciate the out-of-the-box thinking.

    For legal advice and representation, consult an attorney. This response was provided for informational and marketing purposes only, and should not be relied upon as legal advice. No communication with the author of this comment through this website can establish an attorney-client relationship, as the attorney-client relationship can only be established by the mutual understanding of its creation by both the client and the attorney, each party intending to create such a relationship.


  2. All kind of problems. What you are doing makes no sense to me. If you lost the case, how do you have the right to settle the debt? If the corporation is suspended and lost the name, how can you revive the corp.? Your corp. is a new corp. and has no rights against you. In addition, you are clearly self-dealing for you own interest which improper.

    Hope this helps!
    Phillip M. Smith Jr.
    Los Angeles Tax & Business Attorney
    Licensed in the United States Tax Court
    www.culvercitytaxandbusinesslaw.com
    www.corporateattorney.com
    Main: 323-292-4116 ❘ Cell: 562-505-1004

    THESE COMMENTS ARE NOT LEGAL ADVICE. They are provided for informational purposes only. Actual legal advice can only be provided after consultation by an attorney licensed in your jurisdiction. The answer to question does not create an attorney-client relationship or otherwise require further consultation. Mr. Smith is licensed to practice law throughout the state of California with offices in Los Angeles County. He is authorized to handle IRS matters throughout the United States, and is also licensed to practice before the United States Tax Court. His phone number is 323-292-4116 or his email address is philsmithjr@worldclasslawyers.com.


  3. Your "new" company (by reason of using the same name) is NOT the same company that you owe money to so you would be committing a fraud on the court by pretending to be the old company in the filing of settlement papers with yourself being released where it would be perceived (by reason of the same name) that the debt satisfaction was with the old company and not the copycat company formed solely to release you.

    My answer is not intended to be giving legal advice and this topic can be a complex area where the advice of a licensed attorney in your State should be obtained. Please click "helpful" or "best answer" if my answer added any value or add a "comment" if you have more info for me to help you get a better answer.


  4. i agree with my colleagues.

    At best, you are confused concerning the difference between a corporate entity and a corporate name. At worst, you are planning to defraud the government and the public.

    If there is a pressing need to clean up your past, you should retain a lawyer to help you determine the best way to do so.

    This information does not constitute legal advice and does not establish an attorney-client relationship.


  5. I agree with my colleagues, that your plan is ill-conceived at best.

    Obviously, you would like to be free of the obligation imposed by the judgment.

    If the corporation is defunct and no one was assigned the right to the judgment, then I suppose no one is bothering with it, and it will lapse on the 10th anniversary of the judgment (or the renewed judgment, if any), and no need then for any tricks to avoid it.

    Does that ease your mind at all?

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