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QLD Exposed to Debt by Taking Over Company?

Discussion in 'Debt and Bankruptcy Law Forum' started by snoopy, 9 December 2014.

  1. snoopy

    snoopy Member

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    I have a court order that I must take over a company from ex wife. Does she have to expose to me to debt if any that is under the company name? Help!
     
  2. Sophea

    Sophea Guest

    Hi Snoopy,

    What do the orders state exactly? What do you mean by "take over"?
    I would assume the answer to your question will be yes, but it depends what position you will hold in the company, i.e. managing director, etc.
     
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  3. Rod

    Rod Well-Known Member

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    Potentially yes. If there is the potential for liability, was any provision made in the orders to protect you in this circumstance?

    If the is no protection provision, see if you can get one. Depending on the business value and the nature of the business the potential liability could be huge.
     
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  4. Sarah J

    Sarah J Well-Known Member

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    I believe your ex-wife does have an obligation to disclose all relevant information related to the company, including debts and liabilities as well as assets.
     
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  5. Tim W

    Tim W Lawyer
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    1. What is the background to this order?

    For example, is it part of​
    • A property settlement in a family law matter?
    • A Succession matter?
      (eg where she has died, and her Executor appoints you as a sole director)
    • A personal bankruptcy (hers)
    • An incapacitated director stepping down
      (eg on medical grounds)?
    • Some sort of trustee arrangement?
    • A Voluntary Administration (where as part of the administration,
      she has to "go", and you are left to become sole director,
      or just the sole remaining employee)?
    (note that it might not be any of these things, I'm just guessing out of common scenarios)


    2. What is the legal character of the business?

    For example, is it​
    • a corporation ("a company")?
      (if so, are you a director already - perhaps the sole surviving one, or
    • a shareholder (even if not a majority shareholder?)
    • a partnership (in which you, as a surviving but until now "silent" partner,
      might have to "step up", and become, so to speak, "un-silent"?
    • a sole tradership, where the business is "just her",
      with no other structure around it?

    3. What does "take over" mean?


    For example, does the order require you to​
    • Become a majority shareholder (such as in a debt for equity settlement)?
    • Become a sole director (because you're the only one left who is eligible/ suitable)?
    • Start to fulfil your responsibilities as a (formerly "silent") partner?
    • Become an employed manager?
    • Become a trustee of the business?

    4. "Exposed To Debt"


    That's a complex question, with too many "it depends" to make a reasonable comment here,
    especially without knowing what the order actually says, and where it came from.

    For example, things can can unfold differently depending on if you are (one or more of)
    a shareholder, a director, a partner, a guarantor, a creditor, a debtor, a trustee, a beneficiary,
    or simply a plain and ordinary employee.

    It might also depend on whether or not you have any existing involvement in the business at all.
    For example, the business might be all hers, and you are not involved in any way at all.
    In such cases, her business problems, including debt, might, literally, be none of your business.
     
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    #5 Tim W, 11 March 2018
    Last edited: 11 March 2018
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