Can an Incorporated company close in debt, then open a new company?

Exhausted · #1 (**permalink**) 08-10-2009, 05:06 PM

I have a home business in the telecom industry, and another company has owed me almost $4000 since January. I turned them into collections after trying to collect for months with no luck. The collection company says they are in 200K+ of debt and they replied to a letter saying they were closing down. But I have found out that the owner just opened a new company doing the same thing, just changed the name slightly. They were incorporated, so I believe if they close I am out of luck. But it is legal to close shop owing that much money and just open a new company doing the same thing?
It seems there should be some law against that, or they should be banned from the industry somehow. Is there any recourse here?

Feel free to reply with advise, or questions.
Thanks in advance!

sapphirecapital · #2 (**permalink**) 08-10-2009, 05:20 PM

a. depends on how they close, bankruptcy and you are out,
b. pierce the corporate veil and attack the owner, that needs more details and may cost more than you want to spend
c. call the police, it may be fraud if it is done continuously

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