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Former Employer never pay back what he borrow

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ckyiu516

Member
What is the name of your state (only U.S. law)? California

A little less than two years ago, I took out a line of credit from a bank for my former employer because the business was slow at the time and he needed some cash for the company (Restaurant).

He promised to pay all the necessary fees and interest and he should have the loan pay off in a few months. That few months turned into more than a year. I no longer work for the company since December of last year and I recently lost my job too. So I asked him to start making the monthly payments so I would not default on the loan but he kept making excuses to not do so. I am really close to suing in small claims court to get the money and pay off the loan and move on with my life.

Now the problem here is that I wrote the check out for the amount of $5,000 to the corporation but I went to search for it in the County's database, it is no longer there. Can I sue him directly? I saved all the emails that we had back and forth and all the statements and the check that I wrote out to him. In the emails, I asked him to pay back immediately, I also asked him to pay off the loan and take over the monthly payments.

Help!!!

Thanks all!!!
 


Zigner

Senior Member, Non-Attorney
You would need to sue the corporation. Furthermore, you would need to prove the existence of a loan.
 

ckyiu516

Member
You would need to sue the corporation. Furthermore, you would need to prove the existence of a loan.
I have all the documents for the loan. The loan is under my name but I do have the check that was issued by me to him with the corporation name on it. I tried to search for the corporation but it did not show up. Can I sue him personally because he was the CEO?

Thanks
 
You need to name the Restaurant (Corporation) as the Defendant and name serve the owner* as the Agent, the papers. If the business is still in operation then serve them at that address. If it isn't, then serve the papers on the owner where he lives.

(* I'm assuming the CEO is / was the owner, if not, substitute President, Manager, or whatever title he had)

If the Restaurant has declared bankruptcy then you may have to refile with the bankruptcy court. But just because the restaurant has closed does not mean it is in bankruptcy.

While the owner might have discussed and made the promises, he did it as an employee of the corporation and not personally. That puts the liability on the corporation, not him. Since a corporation is mute, a person must be named to receive the papers. That person is usually the President, a specific lawyer, or a recognized Agent.

Keep those emails AND especially the canceled check. Make some back-up copies for your own safety. Without them you won't have much of a case.

And good luck
 

ckyiu516

Member
Thanks for the help Mr. Fusion

What if he changed the business name for instance? I have a feeling that he might also have abandoned the business name. The business now is one branch of the Corporation umbrella if that made any sense? Can I name the current business since it used to be a subsidiary of the corporation?

Thank you once again
 

Zigner

Senior Member, Non-Attorney
Since a corporation is mute, a person must be named to receive the papers. That person is usually the President, a specific lawyer, or a recognized Agent.
The words that Mr. Fusion is looking for are "Agent for Service of Process". Look here ( http://www.sos.ca.gov/business/be/service-of-process.htm ) for more information.

(Serving on any person who is not the Agent for Service of Process may futile and, there is no way to say if a person is "usually" the President, a lawyer, or anybody else.)
 

ckyiu516

Member
Thanks Zigner

I just did the search and the corporation is Suspended. Does this mean that I cant go after what he owed me? I tried to search the subsidiary company but could not come up with anything either.

Also zigner, when you mentioned the existence of the loan, can I use the statements from the bank and the emails that we communicated?

Thanks for everyone's help
 
Zignor is quite correct and that is a good link. Unfortunately it does not exactly answer your exact situation without a lot of hunting.

You might contact your local Small Claims Court clerk. They will assist you with such questions if you already have done your homework. What they won't do is answer legal questions or research for you.

In summary, you may serve the summons on any officer if they have been designated an agent by the Corporation.

CA Codes (corp:1700-1702)
(see sec. 1702-a)

The President or CEO are automatically agents for service.

Use the current Corporation name but underneath write in
"Formerly doing business as XYZ" then the current address.

All your documentation is important. The canceled check denominates the loan amount. The corresponding emails admit liability on his part (if he acknowledged the loan in the emails). If he made any promises to repay that may be an admission guilt (or liability). Do not attach the originals to the claim. Use copies for everything except your actual court appearance.

The downside is to file a claim costs money. When you aren't working that can sometimes be a problem. Even if you win, you might not see the money for some time.

Good luck
 

ckyiu516

Member
Thank you for all your help.

Since I have two years from the spoken promise was broken to file a small claim, how do I determine that two years? Does it start when I ask him to start repaying and he ignored me? Does it start the date that I loaned him the money?

Thanks
 

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