Sylvia had been going great with her syndicated radio show. She had advertisers, 100 radio stations carried it. All was well until the one advertiser filed bankruptcy. Sylvia had been on top of it and had her business manager, just 45 days prior to the filing, collect $50,000 of the $100,000 then owed. She really felt good about this action and quickly replaced this advertiser with another
Twelve months later the letter came from the bankruptcy managers saying Sylvia owed to the court that $50,000 paid within the 90 days prior to the filing. Sylvia wrote a nasty letter saying that she was still due $50,000 and no way was she paying… Plus, the economy was collapsing and her radio show was floundering. Entrepreneur that she is, Sylvia found a new business to enter and began building it under the same umbrella as the radio show, a S-corp. When the court garnished her company bank account, she merely opened an new S-corp for the new enterprise. After all, it had nothing to do with the radio show.
Unfortunately Sylvia did not know the law and perhaps had her head in the sand. It turns out the new enterprise, having taken accounts from the old enterprise, even though for a different business might make her vulnerable. Indeed, the court could make the case.
