A closely held corporation has 5 cases in Court in 3 it is
Plaintiff,
in 2 defendant. The corporation filed bankruptcy chap 7. So the
cases
are temporarily stayed. I understand the stay is granted to
protect
the corporation etc. I am one of the officers. Two of the
actions the
lawyer would like to continue, if I pay them and take
responsibility.
In particular one Default judgment, which is in appeal, is very
strong
and will get vacated. OR corporation can file separate action
for
relief from a judgment because of meritorious defense. I don't
want to
gain anything but I think if only those two cases go forward
corporation can come out of bankruptcy or at least have enough
money
to pay most of the creditors, so can I do this if I take
responsibility.
The cases are not stayed. Collection action is stayed. The
plaintiff's against the corporation cannot continue their
collection actions, and these cases are effectively stopped. But
in the other cases, the corporation as a plaintiff can continue
its actions against others. The attorney is telling you that he
won't continue without being paid, and that you personally can
guarantee payment. The key question for you is how do you
personally benefit by personally guaranteeing the corporation's
debt to the attorney?
McGyver
