From time to time, civil litigation requires that a litigant sue a dissolved corporation. At common law, a corporation ceased to exist and could not sue or be sued once it had dissolved, but the California legislature abandoned these common law rules in 1929. See Penasquitos, Inc. v. Superior Court (1991) 53 Cal. 3d 1180, 1184-85.
Last week, it was reported that a San Diego corporation, Trovagene, Inc., fired and initiated business litigation against two of its executives - CEO Antonius Schuh and CFO Stephen Zaniboni. In that lawsuit, the corporation alleges that the two executives breached their fiduciary duties by usurping a corporate opportunity that should have been presented to the corporation, but was instead taken for the personal gain of the executives. Schuh and Zaniboni deny the allegation and released a statement claiming that "there are no merits to the actions the company has taken against us." Schuh has since stated that he plans to file a lawsuit against Trovagene for wrongful termination, which he expects Zaniboni to join. Unfortunately, this sequence of events is not uncommon when the relationship between a business and an executive sours.
Litigation is common in real estate matters, mobilehome parks and businesses. Many clients view the trial as the end but often do not realize that obtaining a monetary judgment and actually collecting the dollars can be two very different things. Statistically about 80% of all judgments awarded are never collected and for many collection is the most difficult part of winning a lawsuit. While the court has the sole responsibility to award the judgment, once the successful party has the judgment, it is their sole responsibility to enforce the judgment and collect the dollars.
When businesses become involved in a business dispute, and one of the parties is sued by the other it can become a huge distraction. There can be significant contingent liabilities associated with the dispute, and disruption in the work of the management team. It's important to immediately draw upon the experience and expertise of a proven business litigation law firm. At the Loftin Firm, we understand the complexities of business litigation, and will help to identify several potential strategies to resolve the dispute as efficiently as possible. Litigation is, by its very nature, the most expensive and time consuming option for all parties. We will work to help to establish common ground, negotiate resolutions to issues that avoid litigation, and guide you through alternatives such as mediation or arbitration. It will be important for you to bring this chapter in your business to a successful close. It will also be important for you to have the freedom to remain focused upon the business at hand and managing on-going operations.