Can I purchase my husbands business if he's being sued?
Freeport, NY |
My husband owns a small sole proprietorship construction business. He is being sued for abandonment & negligence. If I purchase the business turn it into an s corp, can they come after me if he loses the case?
You can purchase the business but you would also be purchasing the liabilities. Also, any transfer made after the action has been commenced can be deemed to be in fraud of the creditors rights. In other words, if the transfer is made just to avoid paying a potential judgment the transfer can be overturned and the assets can be attached. Even if you could purchase the business or just the business assets the money you paid for it would be at risk as well as any other property, real or personal, in which your husband has an interest. I suggest your husband get himself a good litigator and try and settle the action.
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The other issue is whether you are liable under New York law. I'd recommend you sit down with a Business Law attorney licensed to practice in the State of New York and sort out your best options going forward. Being in the construction business is challenging enough. Doing it through an unprotected Sole Proprietorship really puts a target on your husband's back. I hope this works out for you and that you'll be able to work out a settlement. Good Luck !!
If you don't pay fuill value they can sue you both for fraudulent conveyance.
I am a former federal and State prosecutor and now handle criminal defense and personal injury/civil rights cases. Feel free to check out my web site and contact me at (212) 577-9797 or via email at Eric@RothsteinLawNY.com. I was named to the Super Lawyers list as one of the top attorneys in New York for 2012. No more than 5 percent of the lawyers in the state are selected by Super Lawyers. The above answer is for informational purposes only and not meant as legal advice.