In order to obtain limited liability, Tom and Doris formed an LLC to operate their catering business. They sometimes deposited the proceeds from catering jobs into their personal checking accounts. If they needed to pay personal bills and were short of funds, they used the business account. If creditors of the business cannot get payment for their invoices, is there anything a court can do to help the creditors?
The Court may order selling collaterals the Company has pledged in the creditors favor. Otherwise, the court may order to wind up the business and pay creditors from the proceeds of winding up.
