Legal Question in Business Law in Maryland

Re: Small claims Suit Question

You may have a problem if the successor company won't accept responsibility for the actions of the corporation. A corporation is a distinct legal entity, and if it has "shelled out" by transferring its assets to a successor company, and possibly dissolved, there might be nothing left to recover from, even if you were to win the case. There is such a thing as a fraudulent conveyance when assets are transferred from one entity to another, but you have to prove the transfer was done to avoid creditors, which is hard to do.

You should find out what the status of the new company is (corporation, partnership, etc.), which you should be able to do through the Illinois state office dealing with corporate filings, and try suing them to see if they will either settle or defend the case on its merits. And if you've sued in MD, if you are able to get proper service and they ignore it, any judgment you get here would have to be taken out there to collect. A lot of effort for a chance at $350.

Re: Small claims Suit Question

Dear Robert;

I received your email concerning the dissolution of Econo Travel.

I understand that the company is incorporated in the State of Maryland. The general rule under Corporate Law is that a company must first pay off all of its creditors before dissolving. Did you file suit, before or after they dissolved? Were you notified of an impending dissolution? Did you call them before filing suit, and voice any dissatification? Under Maryland Law, a dissolving corporation must either notify all of its known creditors, or declare in its Articles of Dissolution that it has no known creditors.

It is very easy to find out the name and address of directors and officers of Maryland Corporations. Just go to www.maryland.state.us (the State of Maryland's web site). Then you want to go to Departments. You need to get to the Maryland Department of Assessments and Taxation's web site. I believe they have a database of Companies that were incorporated in Maryland that includes the directors, officers, and the principal address. I would search both Econo Travels and Econoline Travel Services. I would also obtain a copy of their Articles of Dissolution.

I would also need to know more details of the nature of your claim. Why are you owed $350?

Sincerely,

Steven D. Rinaldi