4 ms·

A class action lawsuit against who? You cannot sue a company that no longer exists. It is unlikely consumers would be able to defeat limited liability, particul

A class action lawsuit against who? You cannot sue a company that no longer exists. It is unlikely consumers would be able to defeat limited liability, particularly with the argument that "the company should have allocated resources differently."

richardwhiuk 7y ago
If you could prove deliberate fraud, which seems unlikely, then you could probably pierce the limited liability shield. Seems unlikely though.
- Enginerrrd 7y ago
  It might not be that unlikely... For example, it's possible they don't have the advertising invoices to back up the claim that that's where the money went. It is, however, very unlikely that anyone ever gets their money back.
- paulddraper 7y ago
  Yes, LLC don't protect from many criminal charges such as fraud. It would indeed be difficult to prove this was deceptive and not just really poor, even idiotic, business planning.
  - kjs3 7y ago
    Indeed. Sadly, stupid isn't (usually) criminal.
toomuchtodo 7y ago
You sue the corporate officers, and it's up to them to find someone to defend them in court.
- Someone1234 7y ago
  You can quite literally sue anyone for anything. But lawsuits aren't free, and the law isn't on the claimants side here, so they'd lose. So, sure, sue away it is just even more money lost and likely still no scooter or refund to show for it.
  - toomuchtodo 7y ago
    > the law isn't on the claimants side here, so they'd lose. That's up to a jury, not an online forum.
    - Someone1234 7y ago
      It would never go to a jury. The claims of fraud to penetrate limited liability would be thrown out by the judge for having no legal grounding, then they would be stuck suing a limited liability company with no money.
    - filmgirlcw 7y ago
      But the broader point about lawsuits not being free is valid. Because in addition to filing fees, you need to pay lawyers to do this. And I am not a lawyer, but I don't know many good lawyers would would take on a case to go after a bankrupt company that has no assets. And even then, those good lawyers are going to want a retainer and multi-hundred dollar an hour fees to do the work, so sure. File a lawsuit. Spend tens of thousands of dollars to get a judgment that the defendant can't pay. What good does that do? Like, to be clear, if you have more money than God and want to spend time making a point, I'm all for it. You do you. But most people don't have that much money or time to piss away when there is nothing to be gained from the exercise.
      - toomuchtodo 7y ago
        Less solid cases have been taken on contingency. No need to have "more money than God", just a strategy and someone willing to take on the risk.
    - paulddraper 7y ago
bransonf 7y ago
An LLC does not protect one in cases of fraud. IANAL, but I believe the practices of Unicorn may constitute fraud under a legal definition. In such a case, Nick Evans would be personally liable for damages.
- Someone1234 7y ago
  Sure, but nobody has given an example that would be considered fraud. "They spent too much on marketing and not enough fulfilling orders" isn't in itself fraud, just a badly run business that is now bankrupt as a direct result. If the bar for fraud was set that low, I bet half of failed startups would be considered "fraudulent." More than half if you look at restaurants. > Fraud is generally defined in the law as an intentional misrepresentation of material existing fact made by one person to another with knowledge of its falsity and for the purpose of inducing the other person to act, and upon which the other person relies with resulting injury or damage. Unless you have some damning email or other disclosure you'd never be able to prove that they knowingly sold scooters they never intended to fulfil, therefore fraud is out. In fact all the evidence seems to indicate the opposite, that their long term goal was to make this a successful business and grow until the money ran out.
  - bransonf 7y ago
    On 11/13 they promised to be preparing to start deliveries on 12/15. If at this point they had not made an effort to reach this goal (placing an order with the manufacturer for example), that is a misrepresentation of fact. Fraud doesn’t imply malice. They could have jumped the gun on announcing they were preparing to deliver, but doing so would still constitute fraud, especially if this drove an increase in orders.
    - filmgirlcw 7y ago
      If they were still accepting new orders on 11/13 under those promises, that might be fraud. But any of the older backers wouldn't fall under that. You would have to prove that when the statements to prepare delivery for 12/15 were made, the company had absolute knowledge that no future funding was going to come and that it was guaranteed that they were lying. If the company was in talks with other investors and thought it might be able to raise in order to ship what was necessary, that's not fraud. That's bad business and everyone should be weary/stay the hell away from any future venture from this place, but that isn't fraud.

richardwhiuk 7y ago

If you could prove deliberate fraud, which seems unlikely, then you could probably pierce the limited liability shield. Seems unlikely though.

Enginerrrd 7y ago
It might not be that unlikely... For example, it's possible they don't have the advertising invoices to back up the claim that that's where the money went. It is, however, very unlikely that anyone ever gets their money back.
paulddraper 7y ago
Yes, LLC don't protect from many criminal charges such as fraud. It would indeed be difficult to prove this was deceptive and not just really poor, even idiotic, business planning.
- kjs3 7y ago
  Indeed. Sadly, stupid isn't (usually) criminal.

toomuchtodo 7y ago

You sue the corporate officers, and it's up to them to find someone to defend them in court.

Someone1234 7y ago
You can quite literally sue anyone for anything. But lawsuits aren't free, and the law isn't on the claimants side here, so they'd lose. So, sure, sue away it is just even more money lost and likely still no scooter or refund to show for it.
- toomuchtodo 7y ago
  > the law isn't on the claimants side here, so they'd lose. That's up to a jury, not an online forum.
  - Someone1234 7y ago
    It would never go to a jury. The claims of fraud to penetrate limited liability would be thrown out by the judge for having no legal grounding, then they would be stuck suing a limited liability company with no money.
  - filmgirlcw 7y ago
    But the broader point about lawsuits not being free is valid. Because in addition to filing fees, you need to pay lawyers to do this. And I am not a lawyer, but I don't know many good lawyers would would take on a case to go after a bankrupt company that has no assets. And even then, those good lawyers are going to want a retainer and multi-hundred dollar an hour fees to do the work, so sure. File a lawsuit. Spend tens of thousands of dollars to get a judgment that the defendant can't pay. What good does that do? Like, to be clear, if you have more money than God and want to spend time making a point, I'm all for it. You do you. But most people don't have that much money or time to piss away when there is nothing to be gained from the exercise.
    - toomuchtodo 7y ago
      Less solid cases have been taken on contingency. No need to have "more money than God", just a strategy and someone willing to take on the risk.
  - paulddraper 7y ago

bransonf 7y ago

An LLC does not protect one in cases of fraud. IANAL, but I believe the practices of Unicorn may constitute fraud under a legal definition. In such a case, Nick Evans would be personally liable for damages.

Someone1234 7y ago
Sure, but nobody has given an example that would be considered fraud. "They spent too much on marketing and not enough fulfilling orders" isn't in itself fraud, just a badly run business that is now bankrupt as a direct result. If the bar for fraud was set that low, I bet half of failed startups would be considered "fraudulent." More than half if you look at restaurants. > Fraud is generally defined in the law as an intentional misrepresentation of material existing fact made by one person to another with knowledge of its falsity and for the purpose of inducing the other person to act, and upon which the other person relies with resulting injury or damage. Unless you have some damning email or other disclosure you'd never be able to prove that they knowingly sold scooters they never intended to fulfil, therefore fraud is out. In fact all the evidence seems to indicate the opposite, that their long term goal was to make this a successful business and grow until the money ran out.
- bransonf 7y ago
  On 11/13 they promised to be preparing to start deliveries on 12/15. If at this point they had not made an effort to reach this goal (placing an order with the manufacturer for example), that is a misrepresentation of fact. Fraud doesn’t imply malice. They could have jumped the gun on announcing they were preparing to deliver, but doing so would still constitute fraud, especially if this drove an increase in orders.
  - filmgirlcw 7y ago
    If they were still accepting new orders on 11/13 under those promises, that might be fraud. But any of the older backers wouldn't fall under that. You would have to prove that when the statements to prepare delivery for 12/15 were made, the company had absolute knowledge that no future funding was going to come and that it was guaranteed that they were lying. If the company was in talks with other investors and thought it might be able to raise in order to ship what was necessary, that's not fraud. That's bad business and everyone should be weary/stay the hell away from any future venture from this place, but that isn't fraud.