One of the most common frustrations in debt recovery is dealing with a "shell" company that has no assets, while its directors or shareholders continue to live affluently. At Legal Sandbox Georgia, we refuse to accept the excuse that "the company has no money." We specialize in the complex litigation strategy known as "Piercing the Corporate Veil." While the limited liability structure usually protects management, Georgian law provides a powerful exception: personal liability. We utilize Article 9 of the Law of Georgia on Entrepreneurs to bypass the corporate entity and target the personal assets of directors who have managed the debtor company in bad faith.
Our litigation strategy focuses on proving a breach of fiduciary duties. Under the new Law on Entrepreneurs, directors are bound by the "duty of care" and the "duty of loyalty." When a director intentionally drains company assets, prioritizes their own interests over the company's solvency, or continues to incur debts knowing the company cannot pay them (wrongful trading), they lose their legal protection. We conduct deep forensic investigations to gather evidence of such misconduct, demonstrating to the court that the corporate form was abused to defraud creditors.
This is a high-stakes legal maneuver that shifts the liability from a bankrupt legal entity to a solvent individual. If we successfully prove that the director failed to act as a "prudent manager" or delayed filing for insolvency to the detriment of creditors, the court can order them to repay the company's debts from their personal wealth. This includes seizing their private real estate, vehicles, and personal bank accounts. By invoking Article 9, we transform a dead-end claim against an empty company into a viable recovery action against the individuals actually responsible for the loss.
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