Full question:
My corporation was dissolved in May of 2008 and there was a judgement filed against it in June of 2009 the company has no assets do I have to appear for the examination of assets and what do I show the court?
- Category: Discovery
- Subcategory: Depositions
- Date:
- State: California
Answer:
A corporation that is dissolved may still carry on the business of winding up affairs, such as paying debts owed by creditors. If you have received a subpoena to appear for an examination, you may be held in contempt for not obeying its orders. It is possible you may call the attorney for the opposing party to request a rescheduling if you are unable to appear at the time specified.
A subpoena duces tecum is a subpoena which requests items to be brought with the person who is testifying. If no items were requested to be brought, then any items you care to bring, such as corporate records, bank statements, etc., are at your discretion.
In some cases, it is possible to sue a person individually under an alter ego theory, in which the court will "pierce the corporate veil" to find that person liable when there is really no separate identity of the individual and corporation. Whether the alter ego theory applies will be a determination for the court, based on the facts and circumstances in each case.
A person's personal assets are often protected from liabilities of a corporation, unless the person acted outside the authority of the position, breached a fiduciary duty, or the corporate entity is not truly separate from the person's personal dealings. When a corporation engages in wrongdoing, such as fraud, fails to pay taxes correctly, or fails to pay debts, the people behind the corporation generally are protected from liability. This protection results from the fact that the corporation takes on a legal identity of its own and becomes liable for its acts. However, courts will in some cases ignore this separate corporate identity and render the shareholders, officers, or directors personally liable for acts they have taken on the corporation's behalf. This assignment of liability is known as piercing the corporate veil. Courts will pierce the corporate veil if a shareholder, officer, or director has engaged in fraud, illegality, or misrepresentation. Courts also will pierce the corporate veil when the corporation has not followed the statutory requirements for incorporation or when corporate funds are commingled with the personal property of an individual or when a corporation is undercapitalized or lacks sufficient funding to operate.
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.
