Corporate Fraud/Embezzelment – 2 Shareholders
If the CFO in a corporation with 2- 50/50 shares commits fraud of well over $30,000 and has neglected all his fiduciary duties in regards to not keeping any financial records, writing fake cheques to himself, submitting fake receipts etc. for over 8 years, can he file for bankruptcy and not be held accountable for the the money he owes (he does not own any personal assets but is in possessions of numerous company assets)? Can the courts freeze the business and bank accounts halting all business operations if said shareholder gets taken to court by the other shareholder who has been running the business on his own for the past 6 months and has cleaned up the financials completely, including paid all past CRA past due that the CFO neglected to pay, and also employs over 40 employee who will be out of a job if frozen? Thank you so much for you time and effort!
Sincerely
At my wits’ ends!
1 Answer
A bankruptcy will not discharge debts incurred by fraud.
However, the onus would be on the creditor (i.e., presumably yourself and/or your corporation) to obtain an Order from a court confirming that the debt he incurred was obtained via fraud.