Legal Question in Business Law in California

Re: Invested money in a hoax business

You may be able to file an adversary action in the bankrutpcy court. A civil action may also be filed against the person's liable who are not in bankruptcy. We will need to review all of your documentation including any documents you received from the bankruptcy court. Please contact our office at 714 363 0220 for consultation, advice and review of your documents.

Re: Invested money in a hoax business

If your sisterwas a lendor ...she should file an adbersary proceeding in the bankruptcy court as soon as possible.

Re: Invested money in a hoax business

A little confusing, but based on what I understand from the facts as you have explained them, there would be a claim of Fraud, perhaps many other business and/or contract causes of action.

Honestly, a complete review of the facts, and from the depth of them I would suggest on something like on a spreadsheet, would be the first step in determining what rights, if any, of your sister's were violated (or duties of theirs that were breached) and what recovery rights, again, if any, are available to her.

Because of the different company entities, there may be a piercing of the corporate veil among a string of possibilities; my apologies, but there is just much more information needed to give you a more certain answer.

I would be happy to go over it a little more with you if you are interested in providing additional details. I can be reached at 626-578-0708 or via the Internet at www.CorporateProtectionServices.com.

Re: Invested money in a hoax business

Fraud is not dischargeable in bankruptcy. Depending on when the company/ies filed for bankruptcy protection, your sister might strongly consider filing an adversary action in bankruptcy court if she can prove that they defrauded her. She might also talk to law enforcement authorities and, I'm sure, she will have unique insight into the companies about which they might be interested.

Re: Invested money in a hoax business

The laws respecting investment in business are quite strict and provide a variety of protection for investors against not only outright fraud but also careless misrepresentation and under-disclosure by businesses that take their money, as well as the promoters, accountants, lawyers and others who advise and develop the investment.

Nevertheless, many investors lose money in unsound business ventures and have no one to blame (or to sue) but themselves for bad judgment.

Whether your sister's case is one involving fraud, failure to register, failure to make disclosures, illegal manipulation of multiple entities, or whether it is merely an innocent case of a business failure really requires an in-depth evaluation by a lawyer that knows investment and securities law backwards and forwards.

There is nothing at all illegal about one group of business people forming multiple corporations or for the same person to be the treasurer of many, and so forth. At the same time, it is not permissible for officers, directors, etc. of multiple corporations to have undisclosed conflicts of interest or, in many cases, to run businesses that compete.

If fraud or other securities violations have occurred, there is likely personal liability on the part of the promoters, directors and officers and the corporate bankruptcy wouldn't prevent suit against the individuals.

The promise of a definite sum ($60K) by a definite date smacks of fraud. Very vew legitimate small business investments would or could make such a promise.

An interesting issue, which you didn't mention, is whether your sister invested as a lender or as a stockholder (equity investor). Although the governing laws are similar, remember that only lenders are entitled to repayment, usually with interest. People who buy stock become co-owners and are not entitled to repayment of a fixed sum at a definite time; instead they have the prospect of possible dividends and sahre in the long-term growth of the business value.

Your sister should consult with a business or securities specialist attorney soon; if her loss is in the $60K area she needs to take quick and firm steps to investigate what happened, preserve evidence and present her claims in the proper forum against the proper parties.

Re: Invested money in a hoax business

Probably, you may contact me.

Re: Invested money in a hoax business

OK here we go again. These kinds of dancers get me into trouble with the community. Where do you go from here, you stop looking for free legal advice, get out of your chair and go see an attorney who is expertise in this this law/bankruptcy. There may be light at the end of the tunnel in terms of the judgment which is nondischargeable. Even though the company goes bankrupt you still may get the people plus the company but you have to sue them in the bankruptcy court and that is that cost money. Is it pouring more money after bad. Nobody get in actuality to you that and not of the attorneys who ever answer this question can tell you how good a case you have in collecting back what he paid them unless they know all of the facts, all of the facts, and investigate the matter on your behalf. More importantly, why is it your sister asking this question. I practiced law in the San Francisco Bay area for over 30 years and have been part of cases like this. It is called fraud, deceit and it is not a nice picture. I do not practiced in the bankruptcy area. If you wish to consult with me I will be more than happy to do so so please call 925-945-6000.