Expert: Norma Duenas - California Bankruptcy Attorney - 11/3/2010

Question
I received a 10K investment from a fried a few years back. The money was an investment in a business. This was not a loan and there was no note signed. The investment was spent by the business and the investment failed. However my business is still operating. I recently filed chapter 7 and listed the investor and the 10K. This has all been dischared in my BK. Now the investor is sending me emails threatsing to sue my business for self enrishment and possably fraud even thought he was listed in my BK. What is your opionion on this

Answer
If it was a debt that was owed to the person from your business as a sole proprietor then it would have been discharged as part of your bankruptcy. From the information you provided your are saying that this was not a loan. The issue is then did you give them some interest ownership in the business as part of this investment if it was not a loan. If you filed for bankruptcy and you gave them some interest ownership in your business the bankruptcy would not have removed their ownership in the business. If it was a debt that was owed to the person from your business (assuming it was structured as sole proprietor-if was structured differently then it may affect if the debt was discharged) then the debt would have been discharged as part of your bankruptcy. If this is the case then he should not be contacting you or threatening to sue you. You should possibly seek sanctions against him through the bankruptcy court if this was a debt that was owed and was discharged as part of the bankruptcy.

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