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Comment by munk-a

16 hours ago

The store in question was a franchise so potentially the liability will be limited to just the assets of that franchise. But there's a lot of weird stuff here and it looks like the corporation may have (in a legally questionable manner) removed assets from the store to the corporation during proceedings to shield them.

12 comments

munk-a

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alasdair_  13 hours ago

A representative of the corporation, while taking over the store, expressly states that the corporation is taking over the consignment agreement, on camera and with several witnesses.

gamblor956  15 hours ago

Courts are allowed to pierce the corporate veil when that happens.

  • munk-a  14 hours ago

    They absolutely are and a good lawyer, I'm sure, could audit the accounts and find some misdeeds - the issue is that the auditing and even getting access to those records in court is extremely expensive. To my knowledge there isn't a way to trigger that kind of a discovery in small claims so you need to go through the pricey legal system.

    The money in question here is the proceeds from selling a collection valued at 200k - the recovery (unless you start to get into punitive territory) is likely to be rather meager... and it's a large risk so there may be few bites on firms willing to take it on purely commission.

    • swiftcoder  8 hours ago

      > unless you start to get into punitive territory

      Is there not potential grounds here for punitive damages? The false police reports and harassment seem egregious even by corporate standards.

      And the corporation is valued at $400 million, so it's not like the pot isn't sweet enough

    • benmmurphy  6 hours ago

      In the UK you can make an order of information to compel directors of a company that is in debt to answer questions about company assets, accounts and records under oath. This can be done in County Court and my understanding it is inexpensive. I'm not sure how useful this is for carrying out an audit because I think its meant to be used for seeing if the debtor has the ability to pay. I think generally incorrect trading during an insolvency is meant to be discovered by the receivers during the insolvency process. Also, I'm not sure if there is an equivalent to an order of information in the US system.