Entries from April 2011 ↓

It is a common occurrence in our litigious society for someone to face a lawsuit. In one loses such a lawsuit, can they lose their ownership in a business, even if the lawsuit did not involve the business in any way? Unfortunately, the answer is “yes.”

Continue reading →

In Rev. Rul. 71-86, 1971-1 C.B. 285, an individual was the president and sole shareholder of a corporation. The individual fixed his own salary, hours and duties and was not responsible to anyone else. The individual was held to be an employee of the corporation even thought the corporation was closely held and the individual was in charge of its activities. These factors were considered immaterial, because the individual’s services were material to the operation of the corporation and he was entitled to and received remuneration for his services from the corporation. Thus, the individual fell within the definition of an officer/employee set forth in section 31.3121(d)-1(b) of the regulations.

The title question is an important one for anyone who owns his or her own business. If such a person gets sued, in a matter unrelated to their business, the judgment creditor may seek the entity ownership interest of the judgment debtor in order to satisfy any judgment obtained. The statutory laws of all 50 states allow for this.

Continue reading →

Liability under CERCLA is rather Draconian. Any person who “operates” a facility and pollutes it is liable, even if the person is “a saboteur who sneaks into the facility at night to discharge its poisons out of malice.” United States v. Bestfoods, 524 U.S. 51, 65 (1998). Because of the nature of the statutory scheme, the discharge of even a minute amount of seemingly innocuous material can lead to liability. This is demonstrated by the following cases.

Continue reading →

Each of the states has environmental laws and regulations that have the potential for causing great monetary mischief for property owners. In 1980, the federal government got into the act, when Congress passed the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), codified at 42 U.S.C. § 9601 et seq., as amended by the Superfund Amendments and Reauthorization Act of 1986. CERCLA was enacted pursuant to Congress’ power to regulate interstate commerce. See Burnette v. Carothers, 192 F.3d 52 (2d Cir. 1999). “CERCLA generally imposes sweeping liability upon those responsible for releasing hazardous substances into the environment.” Soo Line Railroad Co. v. B.J. Carney & Co., 797 F. Supp. 1472, 1484 (D. Minn. 1992). This statement is quite accurate, for CERCLA liability is rather sweeping, and can create unexpected liability for any property owner.

Continue reading →