Originally Posted by Xavias
I have a question about MDY and bankruptcy. Assuming Donnelly is the business owner of MDY, and say that Blizzard is awarded $15M worth of damages, will Donnelly's personal assets/cash be affected? Or is MDY its own entity in that respect. As an example, in Australia, if your company is a registered PTY LTD, it is an entity and independent from the owner. Meaning that if the company falls into bankruptcy, the owner just walks away from it and calls it a day.
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Well I'm not a lawyer but I am an accountant.
Short answer is that assuming MDY is a limited liability company (LLC) as the Americans call it then it'll operate in the same way as your Australian PTY or my LTD, that is to say the owners liability is legally limited to the amount invested. That is unless the owner has taken the unusual step of also giving personal guarantees in one form or another to third parties such as banks or other shareholders.
Sole Traders and Partnerships are wholly and severally liable (that is to say the debt is incurred in full by all the people involved up to the full amount due, you don't get to split it, pay your share and then walk away).
From what I can see MDY is an LLC, so the guy will essentially drop the company as bankrupt and walk away. I'm not aware of any U.S. legislation that lets litigants pursue the owners if a company is unable to pay a legal penalty, but I'm open to clarification on that particular point.