Corporate effect on a personal bankruptcy

September 21st, 2007 by Questions

How much information regarding a corporate entity wholly owned by a bankrupt is to be provided to the trustee, and is assigning the shares of a corporate entity common, where it is a separate legal entity?


One Response to “Corporate effect on a personal bankruptcy”

, Barton Goth GCO Bankruptcy Trustees said:

Technically speaking, if you own a corparate entity and file for bankruptcy all of the sares of this corporation vest in the trustee (i.e. must be assigned over to the trustee) as they are non-exempt assets.

If there is any value to the corporation the trustee is obligated to realize on these shares. This can be done by simply selling them to an interested part at a value equivalant to the valuation of the company, or technically good go as far as having the trustee sell all the assests of the company directly.

In terms of separation, technically it exists as it is a separate legal entitity, but as the sole shareholder you own this company personally. As a result the shares and indirectly the assests become an asset that must be valued and realized on for the general benefit of creditors.

This can be quite a complicated area so I would suggest you contact local trustee and discuss this directly.

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