With the economy in the state it is, we have been handling a great deal of issues relating to collecting and defending against false mechanic’s lien and bond claims, filing lien and bond claims, and handling collection lawsuits. One of the biggest consequences in the legal industry of the market downturn has been the influx of shareholders and members being sued personally for corporate debts.
This has largely come about through general contractors’ failure to follow and understand the Texas Trust Fund and Fraudulent Transfer Act statutes. Also, most companies are not following the proper corporate formalities as required by the State of Texas. All of these things can lead someone to be sued personally and their personal assets levied to pay for corporate debts. Small businesses really need to understand the statutes, their applicability to their companies, shareholders and members, take all steps necessary to protect themselves against potential litigation. Notice I say “potential litigation.” Don’t be like most people who don’t seek legal advice until it is too late and they are already in trouble.
Kelly M. Davis