4 ms·

There is a specific california law which pierces the corporate veil specifically for unpaid wages. https://hunterpylelaw.com/2021/02/alter-ego-piercing-the-cor

There is a specific california law which pierces the corporate veil specifically for unpaid wages. https://hunterpylelaw.com/2021/02/alter-ego-piercing-the-corporate-veil-in-california-wage-and-hour-cases/ https://hunterpylelaw.com/2021/02/alter-ego-piercing-the-cor...

anonymouskimmer 4y ago
A bank going belly up and temporarily eating deposits of other corporations doesn't strike me as abusive on the part of the depositing corporations. I doubt the corporate veil would be pierced until the business itself goes bust without paying wages. I'm not any kind of lawyer though.
- gsibble 4y ago
  My attorneys made it 100% clear that missing payroll would make the officers and directors liable immediately in this situation. It was news to a lot of the companies we talked to.
  - deleted 4y ago
    [deleted]
  - jbaczuk 4y ago
    What about the investors, who are also owners, and probably pressured the company to take on debt from SVB?
  - anonymouskimmer 4y ago
    I assume the officers are liable as shareholders? And by the time this liability was pursued in court the SVB replacement should be working well enough to pay everyone. Unless the regulatory agency can demand immediate payment from the accounts of the officers and directors.
    - gsibble 4y ago
      Officers are liable as managers basically. Same as directors. Similar to fiduciary duty.
- AdamJacobMuller 4y ago
  If there are 20m in unpaid wage claims and they see that there were 20m in bonuses paid out in the last 30/60/90/whatever days, I think a decent prosecutor could make an argument that it abuses the corporate liability shield to pay yourself bonuses when you could have or should have known that the company was not healthy. Even if you can't make the argument that they could or should have known that the company was unhealthy, I think the argument can be made that the individuals who are missing base salary deserve to have that paid even if it requires clawing back some extraordinary compensation for executives.

anonymouskimmer 4y ago

A bank going belly up and temporarily eating deposits of other corporations doesn't strike me as abusive on the part of the depositing corporations. I doubt the corporate veil would be pierced until the business itself goes bust without paying wages. I'm not any kind of lawyer though.

gsibble 4y ago
My attorneys made it 100% clear that missing payroll would make the officers and directors liable immediately in this situation. It was news to a lot of the companies we talked to.
- deleted 4y ago
  [deleted]
- jbaczuk 4y ago
  What about the investors, who are also owners, and probably pressured the company to take on debt from SVB?
- anonymouskimmer 4y ago
  I assume the officers are liable as shareholders? And by the time this liability was pursued in court the SVB replacement should be working well enough to pay everyone. Unless the regulatory agency can demand immediate payment from the accounts of the officers and directors.
  - gsibble 4y ago
    Officers are liable as managers basically. Same as directors. Similar to fiduciary duty.
AdamJacobMuller 4y ago
If there are 20m in unpaid wage claims and they see that there were 20m in bonuses paid out in the last 30/60/90/whatever days, I think a decent prosecutor could make an argument that it abuses the corporate liability shield to pay yourself bonuses when you could have or should have known that the company was not healthy. Even if you can't make the argument that they could or should have known that the company was unhealthy, I think the argument can be made that the individuals who are missing base salary deserve to have that paid even if it requires clawing back some extraordinary compensation for executives.