Officer Liable for Restitution of Corporation’s Gains in Violation of FTC Act

In Federal Trade Commission v. Commerce Planet, Inc. (9th Cir. March 3, 2016) 16 C.D.O.S. 2355, the Federal Trade Commission (FTC) sued Commerce Planet, Inc., and three of its top officers for violating § 5(a) of the FTC Act, which … Continue reading

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Filing Requirements and Suspension of Corporate or LLC Powers

California limited liability companies (LLCs) and California corporations are creatures of statute, and their failure to comply with statutory requirements can lead to their rights, powers, and privileges being suspended by the state. Annual Report to Secretary of State Each … Continue reading

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Court Permits Assets of Business Entity to Be Used to Satisfy Creditors of Related Entity

In Toho-Towa Co., Ltd., v. Morgan Creek Productions (2013) 217 Cal. App. 4th 1096, the court held that the assets of one business entity could be used to satisfy the obligations of a different, but related, business entity. This case deals … Continue reading

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Demise of the Notion That Alter Ego Claims Belong to the Bankruptcy Estate

Shaoxing County Huayue Import & Export v. Bhaumik In Shaoxing County Huayue Import & Export v. Bhaumik (2011) 191Cal.App. 4th 1189, a creditor of a bankrupt corporation sued in state court to recover payment from an individual based on an … Continue reading

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Dealing With a Financially Weak Corporation

Knowingly dealing with a thinly capitalized corporation and not asking for a guaranty will make it tough to pierce the corporate veil. This is illustrated by the case of Fusion Capital Fund II, LLC, v. Ham, 614 F.3d 698 (7th … Continue reading

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Alter Ego Claims of Creditors Do Not Belong to Bankruptcy Trustee

In Ahcom, Ltd. v. Smeding, 623 F.3d 1248 (9th Cir. 2010), the U.S. Court of Appeals for the Ninth Circuit decided the question whether a creditor of a corporation that is in bankruptcy has standing to pursue a claim against … Continue reading

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Timely Dissolution Can Protect Shareholders

When a California corporation dissolves, it continues to exist for the purpose of defending claims against it (and prosecuting claims in its name), though a claim by a creditor against a shareholder to recover assets distributed in the distribution must … Continue reading

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Personal Liability of Officers for Corporate Obligations

In People v. Roscoe (2008) 169 Cal. App. 4th 829, two individuals (John F. Roscoe and Ned F. Roscoe) were officers, directors, and shareholders of a family company for an underground storage tank that leaked over 3,000 gallons of gasoline … Continue reading

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