Can they find my corporation,is that a dumb question?

[jjwalker]

I set up a corporation to run a real estate company. It is set up with my ex-wife. How would I take my name competely off so the trustee won't question it. I am the "treasurer and director".
I don't want this to come up at the 341 meeting.
Is this easy to do, anybody out there heard of or experienced this.....

[aa06a47]

Yes, they can and probably will. I have a dumb question, why are you trying to hide it from the trustee?

[alh]

A lot on what the Trustee might be able to do would depend on how the corp is set up and what kind of corp it is. It may not truly be "yours" in the legal sense any more than if I own stock in Microsoft that Microsoft is mine. (I realize this is an oversimplification)

Just a thought.

[Minnymouth]

jjwalker,
You start off trying to hide things from the Trustee - it will come back and bite you in the A..........

Minny

[SinkingFast]

My name was on my Mom's accts just as a second person. Only time I write a check for her is when she's sick and a bill needs to be paid. Attny told me months ago to get off Mom's accts. The Court could trace my SS# right to them.

If the Court can find property/assets that don't really belong to me, you think they can find your company??!!

[Rover]

JJWalker,

I don't think that it would be all that easy for the Trustee to find your connection to the corporation. It's very unlikely that anything about the corporation would be in your credit report, and it's my understanding that BK Trustees use the credit reporting agencies for most of their info gathering.

If you want to remove yourself from the corporation, create a Board Resolution removing you as an officer and if you want, also relinquishing your ownership interest. File the resolution with your state's department of corporations. Also, remove your name from any corporate bank accounts. If you have credit cards in the corporate name and your name, you should close them if you can. Information about such credit cards would more than likely be in your credit report, but your can check your credit reports to see if there's anything there that would point to the corporation.

However, as a practical matter, a corporation is a separate legal entity and is not directly involved in your bankruptcy. The Trustee's interest in the corporation would be primarily in whether the shares you own have value and could be sold. I would suspect that it would be easy to demonstrate that your shares in the corporation have no value. After all, who would buy them? Therefore, no value means no asset. Unless there's something you haven't told us, whether the Trustee knows about the corporation may be no big deal.

If you were the 100% owner of the corporation and used it as your personal financial conduit, you could have a problem if the trustee found out about it. But remember, if there's no value, there's no asset to report in your BK filing.

Find an attorney who is willing to explore various "scenarios" with you without feeling that he would be ethically challenged. An experienced bankruptcy attorney should have dealt with similar situations in the past and should be able to ease your mind by letting you know exactly what you should and should not do.

[LostOne0069]

Yes, you can have a problem.

If you own any piece of a corportation... even a few shares of stock... then it's an asset. Try to hide it at your peril. That would be fraud and fraud is a bad idea.

As others have said, talk to an attorney and find out if there are legal means to protect the corporation from your personal bankruptcy.

[kcj]

My DH and I have a corporation that we are the sole officers of. The Trustee was only interested in the balance sheet value of the company. We ran down the bank account (paying legitimate bills) before we filed, because we were told that anything else would be preferential payments.

Our lawyer said that the Trustee could take all the assets of the business as they were technically our assets despite the corporation being its own entity. I argued to him that the company was only worth the net of assets - liabilities. Turns out that is what the Trustee thought as well, and we are "buying back" our own company from him.

I thought about arguing that the company wasn't really worth anything, as DH's skills and reputation are the only thing of value (no inventory or anything). Of course the receivables and cash have value... and thankfully we didn't have to fight to get a reasonable compromise.

[Rover]

My DH and I have a corporation that we are the sole officers of.

The key and unique thing about your situation is that you and your "DH" were the sole owners. I'm not sure what "DH" means, but I'm assuming it's your spouse or someone who was filing bankruptcy with you.

If there are other owners in the corporation outside the BK filers, I don't believe that the same rules would apply. It would then be the value of the shares that would be considered. In that case, if a trustee tried to maintain that the value of the shares was the book value (assets - liabilities), I think the trustee could be successfully challenged before the bankruptcy judge.

Finally, if the shares have no value, they are not assets and not reporting them as an asset would not be fraud. One doesn't have to report things they own that have no value.

[kcj]

It sounds like the original poster is part of a corporation similar to what my husband and I have. If I had removed myself from the company and then filed bankruptcy on my own shortly thereafter, I think that is something the trustee would be interested in.

The value of the shares of stock in the corporation is the net assets of the corporation. Maybe he can't sell the stock, but he can liquidate the company and take whatever money is left. If there was another officer, in our case, the trustee would have been entitled to 2/3 of the net assets.

[Rover]

If there was another officer, in our case, the trustee would have been entitled to 2/3 of the net assets.

Did your attorney tell you that? If not, where did you learn that?

At what point do the value of the shares owned based on market value become the value of the asset instead of a portion of the net assets? What are the rules that would determine that?

From what I've read, only a corporation that is 100% owned by the BK filers can become part of the BK assets. If there is another owner who is not one of the BK filers, it's not a solely owned corporation.

Do you have anything you can point to that would indicate that my understanding is incorrect? I would really like to see it if you do.

[Rover]

OK, I did some more research on how a person's stock in a corporation would be handled and discovered that the issue boils down to whether the corporation is "closely-held" or publicly traded, which makes sense.

In a closely-held corporation, the value of an owner's stock is the proportionate share of assets - liabilities.

[kcj]

I don't have anything concrete. That was my understanding of how it would work, and it is entirely possible that I didn't understand it correctly. It makes sense to me but I know that doesn't necessarily make it true

[Rover]

BTW, in my research, I discovered a couple of things that may be of interest to others.

The State of Florida maintains a website at http://www.sunbiz.org/ which makes it easy to find information about corporations and officers. I suspect that many other states have such a website these days.

Several states, including Florida, have in recent years established the Limited Liability Company form of business ownership. The LLC has most of the advantages of a closely-held corporation but avoids one serious disadvantage of a closely-held corporation. If an owner of a corporation gets a personal judgement against him, the holder of the judgement can take all or some of the owner's shares in the corporation even if there are other shareholders. With an LLC, a judgement holder cannot take a person's ownership interest in the business.

You'll find more info about LLC's in Florida at: http://www.stateofflorida.com/Portal...aspx?tabid=155

[Rover]

I don't have anything concrete. That was my understanding of how it would work, and it is entirely possible that I didn't understand it correctly. It makes sense to me but I know that doesn't necessarily make it true

Based on my further research, I concluded that you are right with regard to a closely-held corporation.