Several years ago I walked away from my firm (my wife and I held I00% of the stock) due to lack of business. I retired, but with no pension or other compensation from the company. There is no business, bank account, or office. I did not file any formal documents of dissolution with the State of California.
? Can my wife and I be held accountable for any past or future liabilities of the company?
2) My former company and I are being sued for non-payment of an invoice for manufacture of an item and I am counter suing for breach of contract.
? Does the loosing party always have to pay attorney’s fees? I understand that the “American Rule” is upheld in California. Is this correct?
1 Answer from Attorneys
The answer to your first question is, Yes.
The answer to your second question depends on whether or not the parties had a contract, which, if there is a provision for attorneys fees will be enforced. If not contract, the American Rule will apply, with the exception if there is a judgment for fraud.