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What is the best way to protect and remove myself from an alter ego suit in los angeles ca, i"m being dragged to?

Los Angeles, CA |

i used to work for both of our family companies, both in the construction field, bought have different owners , one of the companies lost in a legal battle brought by a customer, that company later ceased its operation. there is a judgement against that company granted to the suing customers. that company also later filed for bankruptcy. the suing customer has filed a suit against our other company, where i"m still been employed, its owner and myself as well , claiming that the each of the defendants were involved in the management and operation of the company that has a judgement against her prior to the lawsuit, and there is a unity of interest and ownership between us the defendants.

Attorney Answers 4


Knowing something to be true and proving to an judge in a court system being overwhelmed by budget cuts are two different things. The "shortest cut" would be Requests for Admissions regarding "material facts" leading to a Motion for Summary Judgment or Summary Adjudication of various issues. Assemble all, not almost all, of the available "written" evidence (which of course includes electronic records) and seriously consider retaining a litigator to represent you. If you are referring to the company and it is a corporation or LLC, it must have an attorney to appear in court.

The above is general legal and business analysis. It is not "legal advice" but analysis, and different lawyers may analyse this matter differently, especially if there are additional facts not reflected in the question. I am not your attorney until retained by a written retainer agreement signed by both of us. I am only licensed in California. See also terms and conditions item 9, incorporated as if it was reprinted here.

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This is a summer for alter ego claims--two of my clients are dealing with them now. You need two areas of expertise: (1) someone who really knows and understands corporate law and alter ego issues and (2) a competent litigator. Ideally you might work with a firm that has both areas of expertise.

It is not clear to me whether the suit is against two of you personally or just the second company. An alter ego claim should run to the second company only, asserting that the old company and the new company are really one and the same. None of you should have any personal liability unless you failed to maintain the necessary corporate formalities, e.g., minutes, capitalization, etc.

You might wish to consult with Peter Schwartz, my friend in LA. Peter does both corporate work and litigation, I believe. He is also a great guy.

Good luck.

Ken Sprang
Washington International Business Counsel,
Washington, DC

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Kenneth Allyn Sprang

Kenneth Allyn Sprang


Peter's contact information is: Law Offices of Peter A. Schwartz 9701 Wilshire Blvd 10th Fl Beverly Hills, CA 90212 Map it Phone Number: (310) 277-2535 Fax Number: (310) 277-5809 e-mail:


You need to hire a business litigation attorney who can defend you in this matter. The attorney will be able to advise you as to the best strategies to handle this, which may be doing a summary judgment motion, deposing the plaintiffs, or sending out discovery.

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You need to retain counsel who can review the alleged factual basis for your liability and the actual facts to determine your exposure. If you were and are a mere employee receiving wages, a W-2 for your work, and have no interest in either company you should be free from liability.

Perhaps you have been joined simply to make proof against the real parties in interest easier. Finger pointing, “it’s the other guy,” and back door deals are as common in civil litigation as they are in criminal defense.

The best way to protect and remove yourself will depend on facts you have not posted and your ability to prove those facts if they are favorable. As Mr. Doland suggests, discovery can be a useful tool to make plaintiffs put forth their case prior to trial. Whether you can afford the cost and expense of aggressively defending yourself is another issue.

For starters, you should retain counsel to represent you in the lawsuit. Unless you actually do have a unity of interest with your co-defendants, you should have separate independent counsel. I know this might be touchy in a “family” situation but you might discover that looking out for number one is the best option.

-- Michael

Michael R. Daymude, Attorney at Law
Sherman Oaks Galleria – Comerica Bank Building
15303 Ventura Boulevard, Suite 900
Sherman Oaks, CA 91403-3199
(818) 971-9409

SINCE 1974. Answers provided by me are for general information only. They are not legal advice. My answers assume California law applies. Answers must not be relied upon. Legal advice and counsel must be based on the interplay between specific exact facts and the law. This forum does not allow for the discussion of that interplay. My answer to any specific question would likely be different if that interplay were explored during an attorney-client relationship. I provide legal advice and counsel during the course of an attorney-client relationship only. The exchange of information through this forum does not establish such a relationship. That relationship is established only by personal and direct consultation with me followed by the execution of a written attorney-client agreement signed by each of us. The communications on this website are not privileged or confidential and I assume no duty to anyone by my participation on Avvo or because I have answered or commented on a question. All legal proceedings involve deadlines and time limiting statutes. So that legal rights are not lost for failure to timely take appropriate action and because I do not provide legal advice or counsel in answer to any question, if you are an interested party you should promptly and personally consult with an attorney for advice and counsel. Also, see Avvo's terms and conditions of use, specifically item 9, incorporated by this reference

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