Doing Business with Corporate Entities: Lessons to Learn From a Deal Gone Bad

At its core, each business’s goal is usually the same – generating profits. This is true whether a business manufactures auto parts, provides medical services, or stages a traveling circus. Accordingly, a primary objective of each business is the collection of money owed; any business that fails to prioritize realization of its accounts receivable soon will find that it is no longer in business. Thus, it can be instructive to review one company’s errors and its failed attempts to collect a debt. While the company undoubtedly learned from its mistakes, other businesses would be wise to review its situation and learn those same lessons without experiencing the corresponding loss. Howell Contractors (“Howell”), a Kentucky contracting company, entered into a contract in 2005 with Westview, an LLC organized under Ohio law, to provide services in the building of a residential subdivision in southern Ohio. Several years and one housing collapse later, Howell still was owed roughly $180,000 from Westview for services rendered. After unsuccessful attempts to collect payment, Howell turned to the court system. Howell filed suit in Kentucky, seeking a judgment against not only Westview, but also the individual owners of that LLC. In other words, Howell was attempting to “pierce the… Read full this story

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