When a corporation is dissolved, it ceases to exist as a legal entity. This can make it very difficult to collect money from the corporation if a judgment is entered against the business. If you have a judgment against a dissolved corporation, you should speak with an experienced San Diego corporate law attorney for information about your options and for help exploring legal methods to possibly collect the money you are owed.
Sepahi Law Group, APC has extensive experience with corporate dissolutions and with business litigation. Call or contact us online today to schedule a free consultation and to learn more about how we can help you to pursue any legal avenues available to you to collect a judgment from a dissolved corporation.
Collecting a Judgment Against a Dissolved Corporation
A judgment is entered by a court against a corporation if the business did something wrong or inappropriate. For example, a court may enter a judgment against a business if the company discriminated against an employee or if the company failed to pay wages as promised to workers.
When a judgment is entered, the corporation has to pay the judgment out of its assets. If a corporation does not pay, the party who was awarded the judgment can go back to court to seek enforcement of the judgment.
Unfortunately, if a corporation is dissolved, there may be no one to take legal action against to obtain a judgment and no way to pursue enforcement mechanisms against the dissolved entity.
The question of how to collect a judgment against a dissolved corporation will vary depending upon many circumstances including whether the company went bankrupt; whether the company stated in its dissolution that all outstanding liabilities had been resolved; whether there are any remaining assets to go after; and whether the owners of the business could personally be held responsible for the judgment. A San Diego corporate law attorney can provide advice on the specifics of your situation.
Options for Collecting a Judgment Against a Dissolved Corporation
Some possible options available to collect a judgment after a corporation has been dissolved include the following:
- Consider amending the judgment to add other entities or individuals. If there were multiple parties responsible for the wrongful acts leading to the judgment, it may be possible for the different entities to be held jointly and severally liable. This means you may be able to find others in addition to the dissolved corporation who are responsible for paying you and who you can collect money from.
- Piercing the corporate veil. Corporate owners are typically protected from liability when the company is sued. However, if the corporate owners failed to maintain the legal formalities associated with the corporate structure and/or if the corporate owners engaged in intentionally deceptive business practices, it may be possible to pierce the corporate veil. This could allow you to obtain compensation from the owners personally even though the corporation has been dissolved.
These are a few possible options for collecting a judgment against a dissolved corporation. You may also be able to pursue asset or business buyers or pursue individual guarantees.
Sepahi Law Group, APC can review your situation and help you to determine the best approach to take. Call or contact our San Diego corporate law attorneys online today to schedule a free consultation and learn how we can represent you.