Category Archives:Creditors

Improperly Executed Documents are Creditors Biggest Impediment

Improperly Executed Documents are the Biggest Impediment to Holding Someone Responsible for a Debt.

Occasionally commercial companies will place a debt with me to sue a company debtor and its individual guarantor where the personal guarantee is not properly executed.

The most common way that a personal guarantee is not properly executed (other than no signature), is when the personal guarantor puts a corporate title next to their name. For example, personal guarantors will sign a personal guarantee on the line for the signature for the individual as, for example, “Tommy Signature, President.” While the document that Tommy Signature signed might say that it is a personal guarantee all over the document and in fact make clear that it is a personal guarantee, in the vast experience of Cellai Law Offices, P.C. in the Court system, Judges typically view the inclusion of the word “President” to mean that the person did not intend to personally guarantee the debt.

While one can debate the issue and argue it in Court (and it is always worth arguing because there are some cases that support your position), most Judges look at the inclusion of a corporate title as an intent on the part of the personal guarantor not to be a personal guarantee.

Companies having their account debtors execute a personal guarantee should be very diligent about having an account debtor sign the personal guarantee in their individual capacity without a title.

Government Contract Kickback

Illegal Kickback Revealed in Government Contract

Kick Back in the Procurement of a Government Contract Disallows a Fee

Where a demolition subcontractor failed to pay a fee from a person who helped it obtain a subcontract from the general contractor, the suit was disallowed when the subcontractor sued the general contractor for the fee out of monies owed to the person who helped obtain the contract.

Carlo Cellai, Esq. represented the general contractor and took the position that the fee by the person who helped the demolition subcontractor obtain the contract was an illegal kick back in violation of the anti-kick back laws.

The Court agreed with the position put forth by Carlo Cellai, Esq. on behalf of the general contractor that the payment of any fee to the person who helped the subcontractor obtain the contract was an illegal kick back scheme for which no payment was due.

Massachusetts Lawyers Weekly

Passing NSF Checks Constitutes Fraud

Presenting and Passing Non Sufficient Funds Checks Constitutes Fraud

Carlo Cellai, Esq. represented a bank where a bank depositor and former lawyer deposited checks from a different bank into his bank account.  Before the checks had a chance to bounce, the depositor withdrew funds from the empty account, the checks bounced and caused the bank a loss.

In laying the groundwork for a fraud defense to dischargeability in bankruptcy, Carlo Cellai, Esq. prosecuted the case on behalf of the bank on the ground that the depositors conduct amount to fraud.

The Judge agreed with Attorney Cellai’s position on behalf of the bank and ruled that the depositor had perpetrated a fraud on the bank.  As a result of the creative legal theory, Attorney Cellai set the ground work for a dischargeability claim against the depositor had the depositor filed bankruptcy.

Massachusetts Lawyers Weekly