I have a debtor that refused to pay for services provided. It's a CORP entity formed in Delaware and registered DOB in California. Recently I have found out that the business was SOS suspended and then forfeited all while he was still doing business with my company and receiving services. Now I have turned him over to debt collectors and he claims to the debt collection agency the business was closed and he does not own anything. As far as I know, SOS forfeited does not give a company “closed” status nor protection from creditors, according to SOS a business must first revive itself from forfeited state and then properly close by certifying to FTB that he has no business activities, liabilities, assets, and no creditors/debtors. Business can’t close until then from what I know and understand. Also, the business is an "alter ego" company where its owner serves as a president and secretary, and all bills were paid (before he stopped to) from him personal accounts or from account of him yet another company. The company was also used as a "shill" company as all services were directly provided to his second company. Can we sue his second company, which is still in business, and sue him directly for breach of contract and fraud? I have tons of records to prove fraudulent activity and the "alter ego" nature of his business. Thank you!
1 Answer from Attorneys
Yes, you absolutely can sue the owners and related companies of a corporation that is a mere shell unable to pay its bills, provided you can prove the owner operated the company the same as if it were a sole proprietorship, and/or that the related companies took assets or opportunities of the shell company without paying fair market value for them into the company.