Most (or at least many) "asset protection" tactics are invalid if challenged. There are ways to do it, but their ability to solve the stated problem is questionable - and you'll need a detailed discussion with an attorney to get a grasp on the issues. One safe way is for one company to sell the assets to the other, but it should pay a fair price and there are many other issues to consider. You need a proper consultation.
Any responses posted are purely intended to suggest topics for further consideration. No legal advice should be relied upon unless it is the product of a comprehensive analysis including a thorough one-on-one question and answer session between attorney and client.
Generally you don't, as you face additional fraudulent transfer claims. Perhaps it's cheaper to avoid the lawsuit altogether by w o ring on a settlement, assuming you feel you have liability exposure...
What you describe may be viewed as a fraudulent transfer. You shouldn't do anything before advice from a business/corporate attorney.
A full consultation would be necessary to properly advise you.
By the wording of your question you simply want to transfer equity ownership from one company to another when both companies are owned by the same person. You do not state the nature of the entities, whether company A and/or you will be the subject of the lawsuit as well as other factors which would surface on a detailed examination of your problem. The transfer of assets solely or primarily to avoid claims of creditors is legally improper. Do yourself a favor and consult with a knowledgeable business and/or bankruptcy attorney before you take any action which is likely to complicate your situation and result in unanticipated adverse consequences.
I agree with my respectable colleagues that any transfer of assets while a lawsuit against you is pending will be deemed void and you will be subject to fraudulent transfer allegations. However, if the lawsuit is not filed, it would be a wise idea to contact a competent counsel to effectuate a asset purchase agreement, wherein consideration and business purpose elements are legally justified by California Law.
Please be advised that information given by the attorney is used for general purpose only and should not be construed to take it as attorney client relationship. Answers given by the attorney should not be treated as advice. It is always wise to retain counsel as information provided in this section is educational only, which is based on incomplete and preliminary facts provided by the questioner.
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