I have a civil action pending in Superior court against the corporation that is been represented by counsel. I was just advised that the corporation has been dissolved and does not exist anymore. Do I have to dismiss my lawsuit even if I do not think that the owner had right to dissolve it. Thank you.
No, you don't have to dismiss the complaint. In fact, you should retain a local attorney, to determine if the principals have any personal liability. In other words, see if there is a good faith basis to pierce the corporate veil. Of course, if the entity is now defunct, there is a good possibility that it may have no assets and thus, nothing for you to recover from.
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I agree with my colleague. I would add that even if you do not need to withdraw your lawsuit it might be beneficial to do so. You should consult with a local attorney.
File a motion to amend your pleadings to add the individual owners and allege that you should pierce the corporate veil
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The fact that the company has an attorney is a sign there is money somewhere. Get an attorney and talk to them.
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Dissolution of the entity will not stop the court case. To the extent shareholders may get distributions when there are unpaid creditors you may be able to claw back such payments. In addition there may be other fraudulent transfers to pursue. And there can be alter-ego liability as others have mentioned. That depends on about fifteen different factors.
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I also agree with my colleagues. I do not know the nature of your case, but keep in mind there may be a potential for insurance recovery depending on the type of claim. This is irrespective of whether the corporation is dissolved or has assets. It is more of a practical and financial question on whether it is worth pursuing depending on possible alter ego liability of shareholders, possible inappropriate distributions to shareholders without providing for payment of corporate obligations on dissolution and potential insurance recovery as mentioned. .
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