Liability from potential personal BK partner in S Corp [Archive]

deanobham

07-29-2009, 05:02 PM

I am a 50/50 owner in an S Corp. My partner has run up a tremendous amount of unsecured debt. What is the risk to me and the corp if he files bk?

Thanks in advance,

Dean

sdbird101

07-31-2009, 07:35 AM

The trustee would most likely consider your partners 50% stake in the company an asset, depending on really how much its book value is, and may try to sell his share off to someone, offer it to you, etc. to obtain cash. So if this company is actually of value, and especially if it has debts that both of you have personally guaranteed, I would spend a $100 to talk to a lawyer for a half hour about this.

My big concern is if you are both personally guaranteed on business debts, his bankruptcy could wipe him off leaving only yourself, and if they force you to liquidate part of the business in some fashion, this could force you into bankruptcy depending on your situation.



	Bankruptcy Forum > Before the Discharge > Small Business & Investment Real Estate > Liability from potential personal BK partner in S Corp PDA Liability from potential personal BK partner in S Corp deanobham 07-29-2009, 05:02 PM I am a 50/50 owner in an S Corp. My partner has run up a tremendous amount of unsecured debt. What is the risk to me and the corp if he files bk? Thanks in advance, Dean sdbird101 07-31-2009, 07:35 AM The trustee would most likely consider your partners 50% stake in the company an asset, depending on really how much its book value is, and may try to sell his share off to someone, offer it to you, etc. to obtain cash. So if this company is actually of value, and especially if it has debts that both of you have personally guaranteed, I would spend a $100 to talk to a lawyer for a half hour about this. My big concern is if you are both personally guaranteed on business debts, his bankruptcy could wipe him off leaving only yourself, and if they force you to liquidate part of the business in some fashion, this could force you into bankruptcy depending on your situation.