IF your state’s law provides for notice to creditors upon dissolution and some provision for Creditors to place claims, and IF A gave notice to all its creditors that it was dissolving so that the creditors could file timely claims, any CREDITORS who did not timely file a claim lose.  That’s the point behind most corporate dissolution statutes; to provide for orderly dissolution and payment of creditors claims timely filed and cutting off claims that aren’t.  But if A did NOT do it properly and follow all procedures, then the owners of A and possibly Company B may still owe money.

Are there exceptions to this rule?  Yep.  This is the law and there are always exceptions.  Generally there are 4 exceptions (the details are state specific so I can’t go too far into them in this general post):

(1) where the purchaser expressly or impliedly agrees to assume such debts;

(2) where the transaction is really a consolidation or a merger;

(3) when the purchasing corporation is merely a continuation of the selling corporation;  and

(4) where the transaction was fraudulently made in order to escape liability for such debts.

To determine if there is a merger usually courts will examine:

(1) whether there is a continuation of the enterprise (each state is different),

(2) whether there is a continuity of shareholders (ditto),

(3) whether the seller corporation ceased its ordinary business operations, and

(4) whether the purchasing corporation assumed the seller’s obligations (impliedly as well as explicitly).

To determine if Company B is merely a continuation of A, you must check to see if only 1 corporation remains and if the stock, stock holders and directors are the same (or substantially the same).

BUT, as I said above, the devil is in the details.  While the standards are pretty much the same for all states, the way the courts examine the facts vary quite a bit.  In case of doubt (and I assure you that there will be doubt or should be) talk to a lawyer and learn how to do it right.  Because if you don’t you will be calling me asking for help when Company A’s creditors come after you.

First, there is no guarantee that she will go away no matter how you approach her.  In some cases, a pro se will go away if you ignore him/her. In others, it makes them more aggressive. And vice versa–aggressive response could make them go away, or could make them into a self righteous crusader.

Second, don’t assume that she is stupid.  Occasionally the pro per plaintiff can be cunning and clever enough to drag things out for years.

Third, Courts here in the DMV will give the pro per the opportunity of correcting procedural and substantive errors that they would not have done with lawyers.  Bottom line: you could be litigating with her for a long time.

There are 2 general theories of how to deal with pro per parties. One is to push back hard.  File Motions to dismiss, fight inappropriate discovery, and don’t get sucked into fights over trivia.  In case of doubt, bury them in paper.  Get your Motion for Summary Judgment.  If necessary, file for sanctions.  Alternatively there is what a friend calls the tit-for-tat method.  He call it the “reasonable gets reasonable” approach.  You show you can be reasonable by making a reasonable (not final) set of concessions and offers.  Then indicate that reasonable response is in hope that she will respond reasonably.  If she is reasonable in response, then respond favorably.  But if she is unreasonable, you take away some of your “reasonable” offer.

The “necessary and proper” clause of the Constitution explains a lot.  It can be found in Article I, §8, cl. 18.  The U.S. Supreme Court, in 1819 said that “[G]overnment is acknowledged by all to be one of enumerated powers,” McCulloch v. Mary-land, 4 Wheat. 316, 405 (1819).  So every law must be based on one of the enumerated powers we all know about.  But, in addition, the government must also “be entrusted with ample means for their execution.” McCulloch, 4 Wheat., at 408. Accordingly, the Necessary and Proper Clause makes clear that the Constitution’s grants of specific federal legislative authority are accompanied by broad power to enact laws that are “convenient, or useful” or “conducive” to the authority’s “beneficial exercise.” Id., at 413, 418; see also id., at 421 (“[Congress can] legislate on that vast mass of incidental powers which must be involved in the constitution . . .”).  By the way “necessary” does not mean “absolutely necessary”.  Id. at 413-15.  If the end is legitimate, within the scope of the Constitution, and the means appropriate and the law is constitutional.  Id.

What does this mean?  Well for about 195 years (at least) the U.S. Supreme Court has let Congress decide not only what laws the enumerated powers permit, but what other laws that are convenient, useful or helpful to allow the federal government to act, should be passed.   Oh and by the way, if you really want to see how this helps us, read United States v. Comstock, and watch how the Supreme Court used the Necessary and Proper clause to keep perverts and sex offenders locked up forever.

• Learn the client’s business
• Ask the client questions
• If the client wants to help, let him
• Don’t let the client tell you how to try the case
• Do let the client control the facts
• you don’t have to repeat yourself
• when the judge talks shut up
• say “thank you” even when you don’t agree
• if you don’t try cases you have no business telling others how to try cases
• there is no mistake that can’t be fixed. The trick is knowing how to fix it
• if you do criminal defense work: it is not you who needs to bring a toothbrush to the courthouse
• You get into more trouble talking too much
• get paid. Money or satisfaction but get paid.
• As I get older I yell less
• If you ever are less than candid with a judge the whole world will know it and you will never ever get another chance in court. Judges know.
• stretch yourself
• Moderation is for monks. To enjoy life take a big bite.
• quantity is not quality. Don’t mistake number of pages for quality of arguments
• check their citations. Sometimes they make mistakes
• put it in writing
• take lots of notes
• know when to shut up
• No case is perfect, find the flaw
• there’s always something new to learn
• there is nothing “civil” about “civil litigation”. That’s why I call it “business brawls”

The first thing to do is to check the law. What does the law require?  Then you check the facts:  who did the work?  Was there some agreement about who would do the work and who would get the credit?  Is the phrase or work copyrighted?  Is it trademarked?  Is there some other protected act taken.  Then you check the dates all these things occurred.  And check when you can prove you started using the phrase or work.

Once you have done those things, I would write to the lawyer who sent the C&D letter.  I would try to educate him/her in what the law requires for them to win.  I’ve found that the best response to a C&D letter is to let them know that harassing my client is a waste of time, will cost too much and they will lose anyway.  Usually they don’t bother writing back, they just go away.  But remember, knowing the facts and the law are critical.  If the client forgets to tell me something important this won’t work. So what’s important?  Everything.  Answer my questions fully, completely and hold nothing back.  The volunteer more information I didn’t ask about that you think might be important.  Frequently it is.

I like to discuss with my client whether or not a loss on appeal will make things worse (not counting the extra legal fees and costs).  Keep in mind that trial court decisions are not precedent, appellate decisions may be.  If we lose the appeal, will having a precedent set against your client be bad for the client?  This question needs to be carefully analyzed in cooperation with the client.

My rule of thumb is simple:  what are the merits of the appeal?  If the judge made a bad decision, you appeal it. If the judge made a borderline decision and there’s enough at stake and client can afford it, you appeal it.   Most often the appellant will lose. But not always. It’s an uphill battle.  I always analyze things carefully and work closely with my clients to make that decision.

This seems to be unbusiness-like.  So why do they do it?  Well, some clients take the attitude that they will spend whatever it takes to win, but never settle (pay tribute).  Sometimes this strategy is deliberate as it is intended to frighten off other disputants.  Sometimes it is driven by the lawyers.  In either case, the client needs to be aware of it.

But does a lawyer have an obligation to tell his client that the client is engaging in overkill?  I think the lawyer has to tell the client that this use of their money may not be cost-effective.  Ultimately however it is the client’s decision as to how hard to fight.

Friday afternoon I go over to co-counsel’s office. As I get there he asks me if I’ve seen my emails.  “No, I checked them about an hour ago before I came over.”  “Check them now.”  “OK”  Glory be!  A settlement offer. A big change in their position!  I call my client and we talk.  Then the negotiations start.  To make a long story very short, the case settles at about 6:30 p.m.  The client is happy with the settlement.  O Joy!  Right?  Wrong!  I’m depressed.

What’s the matter with me?  I really wanted to try the case.  I had been practicing and training and working on mastering the facts and knowing the exhibits (their 83 exhibits and our 113 exhibits) completely to the point where I knew which email was which exhibit and could quote accurately many of them.  And then I can’t use this knowledge and win.  The adrenaline rush falls to zero.  The energy rush drops to zero.  I go into a complete crash.  I sleep all day Saturday and finally have enough energy yesterday to do household chores.  Today I’m back to normal.  The client is happy so I’m happy. But I still really wanted to try the case and win it.  I thought I could but it made good business sense to settle so that’s what I advised the client to do.

But I still really want to try that case.