Dissolved LLC owes settlement
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Dissolved LLC owes settlement
I have a judgement against a LLC that
was owned and managed by a single
individual. During the lawsuit the
individual offered a settlement of
25000, in which he was to pay in 3
installments. 2 of the 3 payments were
made and then the LLC was dissolved. My
question is, can I pursue this
individual for the remaining balance
personally since he made the offer
before the the LLC was dissolved? Would
this be considered a ‘personal
guarantee’? Or perhaps grounds for
piercing the veil?
Asked on March 21, 2017 under Business Law, North Carolina
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 7 years ago | Contributor
An offer from a managing or sole member of an LLC to settle the LLC's debt is generally made in his/her capacity as a member of the LLC; it would *not* be a personal guaranty unless he or she signed some document which, by its plain language or terms, stated that he or was guarantying the LLCs debts.
It is not grounds by itself to pierce the corporate veil. To do that, you would have to show that he or she comingled his or her personal funds with LLC funds and otherwise did not "respect" the independent existence of the LLC, which can be very difficult to do.
If you cannot show either of the above, then you cannot sue this person personally; the whole point of a "limited liability company" is to protect its owners from business-related debts and liability.
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