Q: What is a "preference payment" and why do I care?
Q: If I am a victim of corporate fraud, do I have recourse against a deadbeat corporation?
Q: Can I recover the fees that I pay to my lawyer if I win my lawsuit?
Q: What is usury? Is there still a cap on the amount of interest I can charge or pay?
Q: If I am a victim of corporate fraud, do I have recourse against a deadbeat corporation?
A: Yes, but probably not as much as you would like. The State of California has established the Victims of Corporate Fraud Compensation Fund that is designed to provide a source of recovery for those who have fallen victim to corporate fraud.
There are several requirements to qualify for compensation from the fund. Among them, you must have a final California judgment or arbitration award against a corporate defendant for fraud or intentional misrepresentation, or a criminal restitution order from a California state or federal court. The judgment must be dated after January 1, 2003. You must have made diligent efforts to collect from the corporate defendant. Also, the application for compensation must be made within 18 months after the judgment became final. There is a detailed application process that must be strictly followed.
The maximum amount of recovery from the fund for any one transaction is $20,000. That means that if there are multiple victims in one transaction, the $20,000 will be divided among the victims on a pro-rata basis based on the total actual losses.
After paying out from the fund, the Secretary of State then has the right to go after the corporate wrongdoer for the amounts paid out.
There is a similar restitution fund for victims of fraud by licensed real estate brokers administered by the California Department of Real Estate, known as the Real Estate Recovery Account. This fund has similar requirements and is also capped at $20,000 per transaction
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Other questions? Contact:
Daniel Kessler
BKGG Partner
949-975-7500
dkessler@bmkglaw.com