• TalkBass has been independent since 1998. Add your voice.
    Create a free account to reply to discussions, view embedded media, and browse with fewer display ads.
    Join free Log in
    Want zero display ads or expanded classifieds tools? Compare plans.

Carvin Liquidating

#401
bobcruz said:
I don't have a dog in this fight or I would have already done the following: contact both the California Attorney General's office and the San Diego county district attorney to let them know that a corporation headquartered in San Diego (I dunno where they're incorporated) is liquidating, apparently without bankruptcy court protection, and forward to them the above post from Carvin's representative concerning their attempt to walk away from gift card and warranty liabilities. If you move fast, one of those offices can slap a restraining order on Carvin's distribution of corporate assets to the shareholders to ensure that these (and possibly other) liabilities will be addressed. Otherwise you and others will be in the position of having to sue the family after the money is gone. I don't know the particulars but California has very strict gift card protections and I assume the authorities would not look kindly on Carvin making this general announcement that gift cards will evaporate in two weeks. :rollno:
Click to expand...

Hi, Bob.. That is quite useful information, Sir. Thank-you so very much for giving us some possible recourse.

-Rob

. .
 
#402
bobcruz said:
You're SURE that's the result when a corporation liquidates outside of bankruptcy and distributes assets to the shareholders? Don't make me consult those musty old law books! ;)
Click to expand...

As I said, that is the general rule. I don't know if California has a different rule for it's closely held corporations. Also, bad faith in disclosure can result in personal liability for officers/shareholders. I would imagine they have this covered. Otherwise they could just stop sales, and keep the corporation open a year to cover the one year warranty.
 
Last edited:
#403
Summary of California law--this corresponds to what I remembered from four decades ago:

Shareholder Liability Due to Ownership of a Dissolved Corporation | Stimmel Law

Here's another resource:

What Happens to a Shareholder in a Dissolved Corporation?

I didn't attempt to verify the quality of these resources; they're just the first two that came up in a quick Google search. What I think some of you naysayers are forgetting is that Carvin is liquidating, and that action changes the whole shareholder immunity picture. There's no need to "pierce the corporate veil;" the corporation is doing it themselves by dissolving and handing any assets to the shareholders.

C'mon, there has to be an active corporate lawyer on TB (@tombowlus ?) who can give some accurate advice about the liabilities when a corporation dissolves. I just had a rehearsal with a good one yesterday but I don't want to ask him--he's a guitarist. ;)
 
  • Like
Reactions: agedhorse
#405
I didn't say a corporation could just walk away from all liabilities. As the article said, part of dissolving a corporation is dealing with creditors - UP TO THE VALUE OF THE CORPORATE ASSETS. Failing to do so is an example of bad faith, which I mention my last post. Carvin Corp. is still active. If/when they do so, they will have to allow creditors the chance to present claims. They have to use corporate assets to pay off corporate debts before

They just signed a new lease - the landlord is a creditor. So is someone with a warranty. If/when they dissolve, that will not be done overnight. You settle your books. If there is money to cover everything, the balance gets distributed to shareholders.

Once again, liability is limited to the assets in the corporation.
 
  • Like
Reactions: 12BitSlab
#406
bobcruz said:
Summary of California law--this corresponds to what I remembered from four decades ago:

Shareholder Liability Due to Ownership of a Dissolved Corporation | Stimmel Law

Here's another resource:

What Happens to a Shareholder in a Dissolved Corporation?

I didn't attempt to verify the quality of these resources; they're just the first two that came up in a quick Google search. What I think some of you naysayers are forgetting is that Carvin is liquidating, and that action changes the whole shareholder immunity picture. There's no need to "pierce the corporate veil;" the corporation is doing it themselves by dissolving and handing any assets to the shareholders.

C'mon, there has to be an active corporate lawyer on TB (@tombowlus ?) who can give some accurate advice about the liabilities when a corporation dissolves. I just had a rehearsal with a good one yesterday but I don't want to ask him--he's a guitarist. ;)
Click to expand...

I'm not a lawyer but I am an accountant who has dissolved numerous corporations, both domestic and offshore. There are basically two types of liquidations; solvent and insolvent. In both cases there is a public notice posted of the impending dissolution of the corporate entity. This allows anyone who believes they are owed something, whether monetarily or otherwise to come forward. Care is taken to sell of all assets and pay off all liabilities, and depending on jurisdiction, the company either self liquidates or hires a liquidator and it's existence is struck off the books of secretary of state of whatever jurisdiction it was incorporated in. If there are liabilities that are difficult to value, such as warranties, experts can be hired to determine a value and pay out the deemed value to creditors. If a creditor doesn't agree with the value, he/she can challenge it and it could wind up going to court.

With an insolvent liquidation, there is a trustee appointed by a court that oversees the winding up to ensure that creditors are treated appropriately. What you as a creditor end up receiving had to do with how your claim was secured. Secured creditors get paid out first (with the exception of other priority claims, the most notable being unpaid payroll taxes) and unsecured creditors get whatever is leftover.

It is quite rare for any officer or shareholder to be held personally liable. Again, unpaid payroll taxes being a big exception. Whoever signs the 941 agrees these taxes are held in trust for the employee and failure to remit will generally result in personal liability for that officer and potentially other officers involved. If an officer or shareholder receives any preferential payments in the lookback period, those can potentially be clawed back. Otherwise you generally have to show just cause to pierce the corporate veil, which can be done in cases of fraud or comingling of corporate and personal assets.
 
  • Like
Reactions: mikewalker, buldog5151bass and agedhorse
#407
Are the CA records open and on-line if a bankruptcy case is still open and pending. I'm guessing they are solvent, but just a guess since no one can find any legal records of this event.

I'm also guessing they are using a 3rd party to liquidate. This I believe because of the prices seem = > sale prices over the past year or more. Also the way my order shipped. 3 raw speakers and a cover. Shipped in 3 boxes the day after ordering, a Saturday. Carvin boxes stuff carefully. This stuff was either pre-boxed and readied to ship fast/bill fast or (hopefully not) carelessly shipped in the box speakers are stored in. Either way they met their obligation to the terms of sale. Find out in a few days. I hope no one gets any large high $ stuff beaten in shipping. I knew I was rolling the dice and I'm happy they shipped. Hopefully not empty boxes or a brick in each box!

On individual corporate protection, it only covers civil law. As soon as you break criminal laws, you become eligable for a free suite in black and white stripes. My LLC only protects us if some dummy comes on our farmland and shoots themselves. I am not allowed to shoot them.

If the farmland were in IN, and they are comitting a felony while damaging my property, I could shoot them legally. I think I can shoot myself in either state.
 
  • Like
Reactions: mikewalker
#410
You can check with the secretary of state to see the status of the corporation - still showing as active. You can check wit the bankruptcy court to see if one has been filed - none that I can see.

@Joe Ty spelled it out pretty well. Guys, a corporation cannot just dissolve in a day. Corporations are there for a purpose, but that does not mean that a corporation can be established to blindly screw creditors.
 
  • Like
Reactions: agedhorse and Joe Ty
#411
California leads in a lot of environmental and legal areas. Which is why I am surprised that not much info on Carvin closing is available. How are other CA companies trustworthy if they could just close up shop?

Predicted Next weeks posts:
"I bought a liquidated Carvin and it is broken"
"I bought a liquidated Carvin and it arrived damaged"
...
Maybe I'll be surprised if there aren't many liquidated closeout problems ;)
 
#412
seamonkey said:
California leads in a lot of environmental and legal areas. Which is why I am surprised that not much info on Carvin closing is available. How are other CA companies trustworthy if they could just close up shop?
Click to expand...

What do you want? As I detailed above, you can check the status of the company in about 30 seconds.

Anyone can close a business. That's life.
 
  • Like
Reactions: StayLow
#413
buldog5151bass said:
What do you want? As I detailed above, you can check the status of the company in about 30 seconds.

Anyone can close a business. That's life.
Click to expand...

I don't need anything. My Carvin stuff is out of warranty. I do like a bass I have.

If do research companies I buy from, especially major purchases. Usually there is something there that give me indicators the company will transfer assets/ip/service and not just close up. That is one reason I bought a Carvin. Carvin was just really a small company, so maybe it is all I can expect.
 
#415
seamonkey said:
Predicted Next weeks posts:
"I bought a liquidated Carvin and it is broken"
"I bought a liquidated Carvin and it arrived damaged"
Click to expand...

Let's hope not. No real reason to expect that, other than pessimism, which I endorse. Looks like my stuff is probably in or at least some of it. So I'll report on the packaging soon.

If something arrives damaged by the shipper, it might be uninsured, so in that case I think one would be screwed.
 
#416
seamonkey said:
California leads in a lot of environmental and legal areas.
Click to expand...

That's not exactly how the rest of the country sees it. They are the only state that taxes disregarded entities. They have a minimum tax of $900 on any entity, whether profitable or not. For a while they were deferring NOL's from year to year, effectively taxing businesses twice on the same income over multiple periods. Instead of issuing cash refunds, they used IOU's for a period of time. The 9th Circuit is the laughing stock of the legal community with a reversal rate of 80% compared to 64% for the appellate system as a whole.

I advise businesses to avoid California nexus like the plague. Personally, I love to vacation there. :-)
 
  • Like
Reactions: 12BitSlab and ArtechnikA
#417
bobcruz said:
C'mon, there has to be an active corporate lawyer on TB (@tombowlus ?) who can give some accurate advice about the liabilities when a corporation dissolves. I just had a rehearsal with a good one yesterday but I don't want to ask him--he's a guitarist. ;)
Click to expand...

While I do handle a good bit or corporate work here in Ohio, I am not licensed in California, and I as the owner of a magazine which has reviewed gear from Carvin and run ads from Carvin in the past, I am of course conflicted out of the conversation, anyway.
 
  • Like
Reactions: burk48237, 12BitSlab and BadExample
#418
GeorgeBassPlay said:
Just received an email from Carvin announcing the firm is liquidating and that all sales are final... I thought their closing must be common knowledge .. did a search and didn't find a post here on TB... In any case I am just trying to spread the word on this bad news...

Good Luck to everyone who is going to be without a job as a result of this.
Click to expand...
They are premeditated criminal ripoffs that won't stand behind their warranties. I plan to find their names in the California Corporation Commission and sue them personally whether I win or not. It will cost them money and make their life miserable just like they did to me. They took the money and ran, it isn't too bad, they are black-hearted greedy self-absorbed criminals. I suggest anyone with a current warranty problem harass them until they agree to come through.
 
#419
Joe Ty said:
That's not exactly how the rest of the country sees it. They are the only state that taxes disregarded entities. They have a minimum tax of $900 on any entity, whether profitable or not. For a while they were deferring NOL's from year to year, effectively taxing businesses twice on the same income over multiple periods. Instead of issuing cash refunds, they used IOU's for a period of time. The 9th Circuit is the laughing stock of the legal community with a reversal rate of 80% compared to 64% for the appellate system as a whole.

I advise businesses to avoid California nexus like the plague. Personally, I love to vacation there. :)
Click to expand...
They are premeditated criminal ripoffs that won't stand behind their warranties. I plan to find their names in the California Corporation Commission and sue them personally whether I win or not. It will cost them money and make their life miserable just like they did to me. They took the money and ran, it isn't too bad, they are black-hearted greedy self-absorbed criminals. I suggest anyone with a current warranty problem harass them until they agree to come through.
 
#420
Ampslut said:
Sad to see another American Company go by the wayside. I've owned my share of Carvin and I have liked it.
Click to expand...
They are premeditated criminal ripoffs that won't stand behind their warranties. I plan to find their names in the California Corporation Commission and sue them personally whether I win or not. It will cost them money and make their life miserable just like they did to me. They took the money and ran, it isn't too bad, they are black-hearted greedy self-absorbed criminals. I suggest anyone with a current warranty problem harass them until they agree to come through.
 

Latest posts

Top Bottom
Back