If I file a lawsuit against a corporation and they go out of business, if it doesn’t file for bankruptcy is it still libel?
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If I file a lawsuit against a corporation and they go out of business, if it doesn’t file for bankruptcy is it still libel?
Asked on October 26, 2010 under Business Law, California
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
If the company goes out of business, even if it doesn't file for bankruptcy, you are very unlikely to recover anything if the company is legally liable to you. If the company goes out of business, it is likely to not have assets or income; therefore, there is now way to collect money from it. (Indeed, if the comporation is actually dissolved, there won't be any entity there anymore to even be liable.) Since corporations shelter their owners (stock- or shareholders) from personal liability, you can't sue the owners, either. So you may well have established an obligation on the part of the corporation to pay you money, but if there's no money, there's no way to collect.
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