No Personal Liability For Corporate Fraud, New York Federal Court Holds December 14, 2009

Can the president of a small  company  be held personally liable for the company’s issuance of dishonored checks? Not unless the plaintiff can prove that this individual officer was personally involved in the checks’ issuance, said  a New York Federal Judge.

In Interstate Foods, Inc. v. Lehmann, a decision that was recently published in the New York Law Journal, the president of wholesaler Lehmann Meats, Inc. was sued in his individual capacity for fraud because his company – which ceased doing business – issued several checks bearing his purported signature that were invalid.

In dismissing the plaintiff’s business fraud claims and rejecting the plaintiff’s attempt to pierce the veil of the defendant’s corporation, the Court noted that the plaintiff failed to adduce any competent proof that the president of the company was personally involved in the issuance of the checks. Therefore, the Court held, this case fell squarely within the ambit of the general rule that a corporate officer cannot be personally liable for alleged corporate fraud without the corporate officer’s personal involvement.

Jonathan Cooper is a New York Business Litigation and New York Commercial Litigation Lawyer with a focus on New York breach of contract and New York business fraud claims before the Nassau, Queens, Brooklyn, Bronx, Westchester and Suffolk County courts of New York State. For more information, feel free to contact his Long Island office at 516-791-5700.

Post Footer automatically generated by Add Post Footer Plugin for wordpress.