Transactional

By: William J. Burke

Can the creditor of one spouse reach funds in the spouses’ joint account to satisfy the debt? A Delaware County Pennsylvania judge said “yes” in a recent case, Gross v. Laver. Although property jointly held by husband and wife as entireties property, including cash in joint bank accounts, cannot usually be reached to satisfy the debts of only one spouse, the Court held that transfers of money into their bank account over a period of time were “fraudulent” under the Pennsylvania Uniform Fraudulent Transfer Act.

The husband – had his paycheck from his medical practice direct-deposited into an entireties joint bank account, from which disbursements were made for various expenses, including ordinary living expenses and mortgage payments. However, there were many disbursements for other expenses, including substantial expenses for maintaining a number of horses (about $48,000/year), gift of a car to the couple’s daughter, and other expenses associated with the continuation of an affluent lifestyle. The Court considered the amount of funds deposited into the account and what that money was used to pay for, and also considered the duties and services performed by the wife (who did not work outside the home). The Court concluded that there was no reasonably equivalent value received in exchange for the substantial transfers into the joint account, and ordered both husband and wife to pay the judgment. The case is on appeal.

For more information, please contact our office.

By: Transactional Department

Are you a business owner who has had a client go through the bankruptcy process? Have you been sued by the Bankruptcy Trustee to return your money to the Trustee? For more information on your rights to recover your money from the Bankruptcy Trustee, read this article that is posted on our website.

For more information on the bankruptcy process, please contact our office.

By: Transactional Department

Not all debts are dischargeable in bankruptcy. The key is to know which claims can be exempted from discharge and then what steps you, as a creditor, need to take to preserve your non-dischargeable claim. For a primer on the steps you should take, click here.

For more information, please contact our office.

By: Denise C. Werkley

If you have a product or service consider expanding your targeted customer to municipalities or institutions. Many organizations need products and services, possibly what you are selling, and their purchasing departments are looking for additional suppliers. Some use a bidding process and others have approved lists. You should start with a little research about the institutions you want to target and talk with or investigate their purchasing departments. Many are utilizing the internet to solicit new suppliers and you no longer need to know someone who knows someone just to make the list. Here are a few sites to start your research:

Montgomery County http://purchasing.montcopa.org/purchasing/site/default.asp?

Penn State http://www.purchasing.psu.edu/suppliers/

Our firm has experience drafting contracts, reviewing requests for proposal and assisting with negotiations. Please contact Denise Werkley to see how we could help you expand your customer base.

By: Anthony T. Verwey

Read my recent post about personal use of company-owned computers. For more information on your rights, please contact our office.

By: Theodore F. Claypoole

In a recent Centre County Court of Common Pleas case, the Court pierced the corporate veil of a corporation, thereby disregarding the existence of the corporation and making the corporation’s individual principals and their personal assets liable for the debts of the corporation. The Court found that the corporation was undercapitalized and failed to adhere to corporate formalities, and that the principals ignored corporate form.

Evidence was presented that (1) the corporation had done no business in some time, the corporation had numerous debts and had no money in its bank account, and the individual principals made no personal investment in the corporation, instead financing their construction projects through construction loans; (2) most of the corporation’s assets were stored at one of the principals’ private residence and the properties on which the corporation would construct the homes were not purchased by the corporation; and (3) one of the principals would appear at the job site and give instructions to the subcontractors, never indicating if he was acting as a principal of the corporation or in his individual capacity.

This case confirms how important it is for shareholders to properly capitalize a corporation and to follow corporate formalities. For more information on piercing a corporation’s veil or properly forming a corporation or other legal entity, please contact Theodore F. Claypoole at 610-692-1371 or tclaypoole@utbf.com.