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Business Debt/Dissolution of DBA--Was OWED Money and had no debts

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Expert: - 3/20/2010


Question
Hi,

My question is the opposite of the one I've seen posted several places, so it may be slightly confusing.  

A company some my acquaintances ran was dissolved but not for monetary reasons--it was doing OK monetarily but for personal reasons the owners decided to shut it down very abruptly.  They were owed $50,000 by a non-profit to which they'd lent the use of facilities.  Are they, as individuals, allowed to collect that money owed by the non-profit? if the DBA is already dissolved is it too late? is there a statue of limitations or a grace period?  

Then, putting it another way: the non-profit would like to repay the money to the individuals who lent it the use of the facility, is that legal for the non-profit to do from its end?

This is in New York State, in the City of Yonkers.  The former onwers of the business have moved out of state.

Thanks much.

Joshua

Answer
Joshua-
The standard statute of limitations should apply, so that would be governed by whatever contract covered this obligation.

The contract would also stipulate the “rights to receive” or assignability of the asset(s) in question.  Without further information, I cannot give you a more complete answer to the question.  Given the size of the obligation, I suggest that your friend seek legal counsel for a more thorough review of the contract and potential for enforcement thereof.  Part of that review would be if the dissolution of the company invalidated the contract due to its impact on the other party.

Michael

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Michael Fay

Expertise

My focus and specialty is in credit, so that the risk of the debt itself is minimized. This means understanding it, predicting it, and helping to correct it. Having worked in contracts & credit, I have also worked with all of the related documents such as Guarantees (personal and corporate), and Security Agreements (aka UCC’s or “liens” – but I caution you in using those interchangeably).

Experience

I have a broad background with more than 15 years in the credit industry. Ten years with Dun and Bradstreet, first as a field reporter creating reports, then in customer service, finally I served as the credit manager designing risk models for many national and international customers through D&B’s Outsourcing function. Five years with another publicly traded firm where I created the credit department and then served as credit manager for North America. At both companies we used both business and consumer data. You probably know that both business and personal credit have scores; what you might not know is how many different types of scores there are. I am familiar with and have used many different scores in each. Also be aware that each credit type (business & personal) is unique with different processes and different time frames. I have served on the board of directors for companies in many states and still serve in some capacity in a few. I contribute to credit publications and work with the non-profit arm of the SBA called SCORE.

Organizations
ACA International * NACM * Credit Risk Managers * SCORE (SBA)- Counselors to America’s Small Business * Payment Card Industry Network * PaymentSource.com * D&B Alumni * Psi Chi, National Honor Society for Psychologists

Education/Credentials
BIS in Business and Psychology, University of Minnesota * MBA is still in progress (on-line)

Awards and Honors
State of Colorado - State finals in Accounting and Advanced Accounting. * D&B Leadership Winner (3 times) * D&B Leadership Finalist (3 times) *

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