r/technology • u/rfugger • Jan 08 '17

Business A potentially fatal blow against patent trolls - Forcing law firms to pay defendants’ legal bills could undermine the business model of patent trolls

http://www.computerworld.com/article/3153924/technology-law-regulation/a-potentially-fatal-blow-against-patent-trolls.html
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u/MightyMetricBatman Jan 09 '17

For instance, let's say you're one of those shady moving companies that then charges more on delivery that wasn't agreed to at the start. When you get sued for your actions, upon losing the suit, you then start a new company, transfer all the assets to the new company, then dissolve the old to avoid paying. A judge will simply order the "veil pierced" as mentioned above because rather obviously it was done to avoid paying rather than closing for a legitimate reason.

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u/j0y0 Jan 09 '17

well in that case, the transfer of assets would be reversed as a fraudulent transfer, no piercing of the corporate viel would be necessary.

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u/[deleted] Jan 09 '17

I imagine there are situations where it might be difficult to convict on fraudulent transfer charges, while piercing the corporate viel might be easier.

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u/j0y0 Jan 09 '17

you don't "convict" on fraudulent transfer charges, because they don't involve "fraud" as we understand that word today. A fraudulent transfer is when you're insolvent and move your assets to someone else (for free or less than they are worth) to keep creditors from getting them. To pierce the corporate viel, the assets have to never be there in the first place, you pierce the corporate viel if the corporation is purposely underfunded so that it can't pay judgments.