What happens to the debt owed by my company once we close our doors?
Full Question:
My pet store sells pet food and pet related prdoducts. Business is very bad and we want to close the store. We owe about $100,000 to vendors and about $4000 to gas and electric. We are a corporation. If we close our store what could they do to us?
03/29/2009 |
Category: Corporations ยป Corporate Di... |
State: New York |
#15812
Answer:
A dissolved corporation may sue or be sued in all courts and may participate in actions and proceedings, whether judicial, administrative, arbitrative or otherwise, in its corporate name, and process may be served by or upon it.
The dissolution of a corporation does not affect any remedy available to or against it or against its directors, officers or shareholders for any right or claim existing or any liability incurred before such dissolution.
At any time after dissolution, the corporation may publish a notice requiring all creditors and claimants, including any with unliquidated or contingent claims and any with whom the corporation has unfulfilled contracts, to present their claims in writing and in detail at a specified place and by a specified day, which day shall not be less than six months after the first publication of such notice. This notice must be published at least once a week for two successive weeks in a newspaper of general circulation in the county in which the office of the corporation was located at the date of dissolution. Before the date of the first publication of this notice, the corporation must mail a copy of the notice to the last known address of each person believed to be a creditor of or claimant against the corporation.
The giving of notice does not constitute an admission that any person is a creditor or claimant, and does not revive or make valid, or operate as a recognition of the validity of, or a waiver of any defense or counterclaim with respect to any claim against the corporation which has been barred by any statute of limitations or otherwise become invalid.
Any claims which are filed pursuant to the notice, and which are contested by the corporation, may be submitted for determination to the supreme court.
The following are NY statutes:
§ 1007 Bus. Corp. Notice to creditors; filing or barring claims.
(a) At any time after dissolution, the corporation may give a notice
requiring all creditors and claimants, including any with unliquidated or
contingent claims and any with whom the corporation has unfulfilled
contracts, to present their claims in writing and in detail at a
specified place and by a specified day, which shall not be less than six
months after the first publication of such notice. Such notice shall be
published at least once a week for two successive weeks in a newspaper of
general circulation in the county in which the office of the corporation
was located at the date of dissolution. On or before the date of the
first publication of such notice, the corporation shall mail a copy
thereof, postage prepaid and addressed to his last known address, to each
person believed to be a creditor of or claimant against the corporation
whose name and address are known to or can with due diligence be
ascertained by the corporation. The giving of such notice shall not
constitute a recognition that any person is a proper creditor or
claimant, and shall not revive or make valid, or operate as a recognition
of the validity of, or a waiver of any defense or counterclaim in respect
of any claim against the corporation, its assets, directors, officers or
shareholders, which has been barred by any statute of limitations or
become invalid by any cause, or in respect of which the corporation, its
directors, officers or shareholders, has any defense or counterclaim.
(b) Any claims which shall have been filed as provided in such notice
and which shall be disputed by the corporation may be submitted for
determination to the supreme court under section 1008 (Jurisdiction of
supreme court to supervise dissolution and liquidation). A claim filed by
the trustee or paying agent for the holders of bonds or coupons shall
have the same effect as if filed by the holder of any such bond or
coupon. Any person whose claim is, at the date of the first publication
of such notice, barred by any statute of limitations is not a creditor or
claimant entitled to any notice under this section or section 1008. The
claim of any such person and all other claims which are not timely filed
as provided in such notice except claims which are the subject of
litigation on the date of the first publication of such notice, and all
claims which are so filed but are disallowed by the court under section
1008, shall be forever barred as against the corporation, its assets,
directors, officers and shareholders, except to such extent, if any, as
the court may allow them against any remaining assets of the corporation
in the case of a creditor who shows satisfactory reason for his failure
to file his claim as so provided. If the court requires a further notice
under section 1008, any reference to a notice in this section shall, to
the extent that the court so orders, mean such further notice, except
that a claim which has been filed in accordance with a notice under this
section need not be refiled under such further notice.
(c) Notwithstanding this section and section 1008, tax claims and other
claims of this state and of the United States shall not be required to be
filed under those sections, and such claims shall not be barred because not
so filed, and distribution of the assets of the corporation, or any
part thereof, may be deferred until determination of any such claims.
(d) Laborer's wages shall be preferred claims and entitled to payment
before any other creditors out of the assets of the corporation in excess
of valid prior liens or encumbrances.
§ 1006 Bus. Corp. Corporate action and survival of remedies after
dissolution.
(a) A dissolved corporation, its directors, officers and shareholders may
continue to function for the purpose of winding up the affairs of the
corporation in the same manner as if the dissolution had not taken place,
except as otherwise provided in this chapter or by court order. In
particular, and without limiting the generality of the foregoing:
(1) The directors of a dissolved corporation shall not be deemed to be
trustees of its assets; title to such assets shall not vest in them, but
shall remain in the corporation until transferred by it in its corporate
name.
(2) Dissolution shall not change quorum or voting requirements for the
board or shareholders, or provisions regarding election, appointment,
resignation or removal of, or filling vacancies among, directors or
officers, or provisions regarding amendment or repeal of by-laws or
adoption of new by-laws.
(3) Shares may be transferred and determinations of shareholders for any
purpose may be made without closing the record of shareholders until such
time, if any, as such record may be closed, and either the board or the
shareholders may close it.
(4) The corporation may sue or be sued in all courts and participate in
actions and proceedings, whether judicial, administrative, arbitrative or
otherwise, in its corporate name, and process may be served by or upon it.
(b) The dissolution of a corporation shall not affect any remedy
available to or against such corporation, its directors, officers or
shareholders for any right or claim existing or any liability incurred
before such dissolution, except as provided in sections 1007 (Notice to
creditors; filing or barring claims) or 1008 (Jurisdiction of supreme court
to supervise dissolution and liquidation).
§ 1008 Bus. Corp. Jurisdiction of supreme court to supervise dissolution
and liquidation.
(a) At any time after the filing of a certificate of dissolution under
this article the supreme court in the judicial district where the office of
the corporation was located at the date of its dissolution, in a special
proceeding instituted under this section, upon the petition of the
corporation, or, in a situation approved by the court, upon the petition of
a creditor, claimant, director, officer, shareholder, subscriber for
shares, incorporator or the attorney general, may suspend or annul the
dissolution or continue the liquidation of the corporation under the
supervision of the court and may make all such orders as it may deem proper
in all matters in connection with the dissolution or the winding up of the
affairs of the corporation, and in particular, and without limitation of
the generality thereof, in respect of the following:
(1) The determination of the validity of the authorization of the
dissolution of the corporation and of the execution and delivery of the
certificate of dissolution under this article.
(2) The adequacy of the notice given to creditors and claimants and if it
is determined to have been inadequate, the requirement of such further
notice as the court may deem proper.
(3) The determination of the validity and amount or invalidity of any
claims which have been presented to the corporation.
(4) The barring of all creditors and claimants who have not timely filed
claims as provided in any such notice, or whose claims have been disallowed
by the court, as against the corporation, its assets, directors, officers
and shareholders.
(5) The determination and enforcement of the liability of any director,
officer, shareholder or subscriber for shares, to the corporation or for
the liabilities of the corporation.
(6) The payment, satisfaction or compromise of claims against the
corporation, the retention of assets for such purpose, and the
determination of the adequacy of provisions made for payment of the
liabilities of the corporation.
(7) The disposition or destruction of records, documents and papers of
the corporation.
(8) The appointment and removal of a receiver under article 12
(Receivership) who may be a director, officer or shareholder of the
corporation.
(9) The issuance of injunctions for one or more of the purposes and as
provided in section 1115 (Injunction).
(10) The return of subscription payments to subscribers for shares, and
the making of distributions, in cash or in kind or partly each, to the
shareholders.
(11) The payment to the state comptroller, as abandoned property, of
assets under paragraph (c) of section 1005 (Procedure after dissolution).
(b) Orders under this section may be entered ex parte, except that if
such special proceeding was not instituted upon petition of the
corporation, notice shall be given to the corporation in such manner as
the court may direct. Notice shall be given to such other persons
interested, and in such manner, as the court may deem proper, of any
hearings and of the entry of any orders on such matters as the court
shall deem proper. All orders made by the court under this section shall
be binding upon the attorney general, the corporation, its officers,
directors, shareholders, subscribers for shares, incorporators, creditors
and claimants.
(c)(1) Simultaneously with the institution of such special proceeding
for annulment of the dissolution, the petitioner shall apply to the
department of state to reserve the corporation name to the corporation. If
such name shall not be available for use, the petitioner forthwith upon
being notified thereof shall apply to such department for the reservation
of another and available name and any judgment or order of annulment made
in such proceeding shall order and direct the petitioner to execute a
certificate of change of the corporate name to such other name.
(2) The clerk of the court, or such other person as the court may direct,
shall transmit a certified copy of the judgment or order of annulment of
the dissolution, together with the certificate of change of corporate name
in the appropriate case, to the department of state, and a certified copy
of such judgment or order to the clerk of the county in which the office of
the corporation was located on the date of the dissolution. Upon filing by
the department of state, the annulment of dissolution shall be effected.
