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If i know someone intends to sue my llc for something not covered by my insurance, can i shut it down prior to them filing suit?

Business 3 views 2 answers
My small sightseeing tour company is being threatened by an Intellectual Property firm for illicitly using a photo in a blog post about area activities (not specifically advertising, just informational, but it was on the company's blog). My business general liability doesnt cover copyright issues, nor does my normal business attorney. I am an LLC. I did use the photo, i provided credit on the image details but this was not enough apparently, unbeknownst to me. I have since removed the photo but they still wish for settlement. The minimum amount they are asking for is worth more than my company's combined assets. Its a mid-nineties van and a website. Can i legally shut my business down before they officially file a lawsuit? Is $5k too much damages to associate with a photo that wasnt intended for marketing purposes?

Attorney Answers

2
James Desposito ·
Dissolving your LLC in an attempt to avoid the claims of the creditor could expose you to personal liability because of a fraudulent transfer of any LLC assets or for failure to adequately capitalize your company. At this point, you would do well to consult with an experienced Business or Intellectual Property Attorney to assess the merits of the claim, including damages. If you are unable to negotiate a settlement of any claim, you might be better off leaving the LLC in existence, without transferring its assets, so that any liability will remain at the LLC level.
0 upvotes
J Minor ·
Closing down the LLC only makes you a potential target. If the LLC has no assets, and if they sue only the LLC, why bother going through a dissolution proceeding? Just let it go (stop doing business), rather than dissolving it. You would be wise to get the offending picture off your web site, if you haven't already done so. It may be, if you don't respond, that they will not pursue the matter.
0 upvotes

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