What to do about this new creditor

[squrlio]

My Ch7 was filed 8/21, 341 on 9/18 , no asset scheduled for discharge 11/17.

It's a personal BK that encompasses both personal and debts accrued as the result of a failed business for which I was personal guarantor on many accounts.

I did not run the business but it was run by my husband.

Before we 'bought' the business 2 years ago my husband worked for the previous owner. We moved to a new location and changed the store name in June 2013.

He accepted an item on consignment during a shift in 2012 (prior to purchasing the store). As usual he wrote out the item's description and signed that he accepted the item on behalf of the business on an intake form, which the customer still has. There are no 'terms' or disclaimers on the form.

Fast forward to last week...this customer's item may or may not have sold but we cannot find a record of it's disposition. The entire inventory was liquidated very quickly before the business was closed. Quickly... as in a week to sell all of the inventory and what was left got thrown out by the sheriff. My husband cannot remember it ever even being in the new store. This customer, who has not made any contact in over 2 years, all of a sudden decides that he wants his item back and has filed a lawsuit against my husband. He has a picture taken off of Facebook of the item in the new store and a copy of the intake form, which is from the previous store.

My husband was never a member of the LLC under which the store operated. I was the sole member and I have the BK alone. So all debts incurred by the LLC circle back to me anyway.

Is there anything anyone could suggest I do to legally stop this lawsuit against my husband with regards to the current status of my bankruptcy?

[justbroke]

It reads as though you already are framing your defense. Your husband accepted the item for consignment as a employee of a prior company. You purchased the prior company and created an LLC to manage the company. Your husband is a non-member employee of the LLC. At best, the LLC is liable to the customer. You are not in a community property state. At least, that's how I read your defense.

You then mention "new store" which makes me wonder if you did some fancy transfers of property between one "company" (organizational entity) to another (your "new" LLC). I'm not an attorney and I already see issues. First, you say that "we" bought the business. When you purchased the business did you purchase just the inventory or did you purchase the business and its customers as well? I reads as though you purchased "the business" with all debt and encumbrances. In other words, the LLC ("you") bought the customers as well.

If you are unsure about your rights and defenses and even offenses to a lawsuit, you should seek competent, local, business legal advice. The LLC may shield you and your husband, but that's outside the scope of this forum, and certainly for a non-attorney to provide any legal advice.

[squrlio]

Yes, I suppose I am forming a defense, as I have thought about this from a few different angles.

I was trying to determine if the plaintiff can even be considered a creditor since there is some room for confusion on the issue of who owned what and when.

We only bought the inventory. All debt was paid off by the previous owner and we created all new accounts and moved location since the PO's lease term expired. After the new business was established letters were mailed to customers who had consignment items that told them of the transfer and gave them options to leave the item at new terms or come pick them up. Some replied, others didn't and their items were sold and money sent to them as usual but with new rates. There were few complaints.
I agree that I may need to seek legal counsel on this one. The plaintiff in this case is seeking damages from the wrong entity (my husband). So I think he will need legal counsel to guide him as to what to do next.