QUESTION

How to collect an judgement from an LLC if awarded before they run off, shift assets or changed their business name?

Asked on Oct 07th, 2013 on Bankruptcy - North Carolina
More details to this question:
I hired a web development company in Atlanta GA March of 2012. The project was supposed to be finished September 2012. I gave them other chance to complete by January 2013 and it’s now October 2013, and they are still not complete with the project. Prior to hiring the company I expressed to them, I did not want any outsourced developers working on my project. I later found out they did outsource. Communication was made mainly through email with each email showing the lies they continue to tell. I paid them over 20k with a small balance left that is due upon completion of the project. I want to sue them for all the money I paid them to complete the project, money I lost on hiring graphic designers, marketers and the lost of work from me being depressed. My overall concern is if I won any judgment what can I do they refuse to pay, change their business name or shift their assets so I can't collect? I would love the insight on how to approach this before I proceed to contact the registered agent. Thanks in advance.
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1 ANSWER

The problem is that this is an LLC. LLC stands for limited liability company. Unless the LLC has assets, you can spend money and sue all day long but you will not recover anything. If there are no assets, any new LLC can be formed. If there were assets, you would have to get the judgment and prohibit them from disposing/transferring any assets. You can get pre-judgment attachment if it appears that a transfer is really imminent. However, this is a web-development company. What kinds of assets would they have really? A couple of laptops in some guy's apartment? Forget recovering loss of work because you are depressed. This is a contract case - no personal injury. You do not recover for this. You can recover either expectation damages (the difference between what you paid to them and had to pay to someone else to get the job done) or status quo (since they did not perform at all you are asking for all of your money back and to be put in the same position as you were in prior to the start of the contract). If the LLC is in Atlanta, then you need to sue where the LLC either maintains its principal place of business or registered office. You can look up this information at the Georgia Secretary of State's office. Georgia small claims only goes up to $12,000. If you paid out $20,000, then you will want to hire an attorney in Georgia to sue. There are many many litigation attorneys in Atlanta - you will need a business litigation/contract attorney. You do not contact the registered agent. You can have the complaint served on the registered agent or an officer of the LLC. Once a lawsuit is filed, it is possible to get a pre-judgment attachment as I said. However, again, you do not know what assets, if any, the LLC has. Lawsuits are a gamble. There are no guarantees that you will be paid ever. If the company has no assets, they could simply dissolve or go bankrupt. In either case, you get nothing except a judgment. Any new business that buys there assets, if they are legitimate and an innocent purchaser, only buys the assets - not any prior lawsuits or litigation problems. Depending on how the LLC was set up it may be possible to try to attach the personal assets of the owners. If you succeed in getting a judgment against the owners individually, then you can get wage garnishment and go after their bank accounts or other assets owned free and clear. Again, before you do anything, you need to sit down with a business litigation attorney and pay him/her to review the correspondence and contracts here.
Answered on Oct 08th, 2013 at 2:32 PM

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