Fabio's trucking company owes $35,000 to the bank and another $67,000 to the credit union. Fabio decides to incorporate the company and transfer the debt to the new corporation. After six months the trucking corporation files for bankruptcy, seeking to discharge all of the debt. If the bank and credit union try to hold Fabio personally liable

a.
The court would not because the debt belongs to a corporation.

b.
The court would not because Fabio obviously tried to make a profit and shouldn't be punished for failing.

c.
The court would if the judge uses the same bank and credit union.

d.
The court would, piercing the corporate veil because the corporation was created solely to avoid paying the debt.

Question

Fabio's trucking company owes $35,000 to the bank and another $67,000 to the credit union. Fabio decides to incorporate the company and transfer the debt to the new corporation.  After six months the trucking corporation files for bankruptcy, seeking to discharge all of the debt. If the bank and credit union try to hold Fabio personally liable

a.
The court would not because the debt belongs to a corporation.

b.
The court would not because Fabio obviously tried to make a profit and shouldn't be punished for failing.

c.
The court would if the judge uses the same bank and credit union.

d.
The court would, piercing the corporate veil because the corporation was created solely to avoid paying the debt.

justus · Answer

Got it. Nvm.