How to demand a contracted payment from a dissolved company?
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How to demand a contracted payment from a dissolved company?
I am an artistic freelancer who has fulfilled the terms of my contract, for which I expect to receive stipend pay. The company that I hold this contract with did not fulfill their contractual obligations and immediately following ceased operations as a company. Note, I recently learned that this company appears to be a house of cards only firmly associated with one individual, who is now avoiding me and not responsive to my attempts to contact him. There is also substantial proof that this is a reoccurring issues with this company and the related individual and it has received some online press coverage. How do I go about getting paid for
my contracted services? Can a send a Demand Letter to a
Asked on November 2, 2016 under Employment Labor Law, Illinois
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 7 years ago | Contributor
If the company was an LLC or corporation and you were contracted with the company, you're not going to be paid: an LLC or corporation is a separate legal "person" than it's owner(s), and the owner(s) and employees/managers are not liable for the LLC's or corporation's debts. If the LLC or corporation no longer exists and/or is insolvent, there is either no one to collect from and/or no money to collect. You could write a demand letter, try to get the media on your side, etc., but if the business or its owner(s) simply ignores you, there is nothing you can do.
(Technically, if you believe the company was a sham or artifice without independent existence--i.e. essentially just the "alter ego" of the owner[s], with, for example, co-mingled personal and business funds--you could try to "pierce the corporate veil" and sue the owner[s] directly. But be warned that that *very rarely* works: it is very difficult to pierce the corporate veil and overcome the presumption of non-liability for owners. You could spend a great deal of time, effort, and--if you hire a lawyer--money on trying to do this and end up getting nothing for it.)
If the business was not an LLC or corporation, however, you should be able to sue the owner(s) personally, and could potentally collect from the owner(s) personal assets (like bank accounts, real estate, etc.).
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