Bankruptcy after sale of business assets

[kissel85]

What is the name of your state (only U.S. law)? New Jersey

I am currently in the process of selling my service business. I am selling turnkey so sale includes accounts, equipment, employees, and trade name. Trade name is same name as corporation. Most likely the buyer will absorb the assets of my corporation into his own company but continue to operate under my company name.

Can I pay myself the proceeds from the funds of the company's assets and then file for bankruptcy and tell a creditor that I have to terminate the contract and am unable to pay for future unused service? There is a 5-year contract I signed that the new owner will not be interested in taking on. It was mistake to ever have contracted the service because I barely ever use it. I am going to pay for the time I used it but I don't want to pay for the unused service through the end of the contract after the business ceases to exist.

[JETX]

Originally Posted by kissel85

Can I pay myself the proceeds from the funds of the company's assets and then file for bankruptcy

Yes, you can. But you can count on either or both of the following:
1) You getting sued for 'fraudulent conveyance' and the court 'undoing' your fraud, and/or
2) Having the bankruptcy trustee undo your fraud (also a 'preferential treatment') and hit you with sanctions for your illegal conduct.

I STRONGLY suggest you talk with a local bankruptcy attorney who will hopefully help you to understand the illegality's of your 'plan'.