IS THE DEFENDANT?S BUSINESS VIABLE?
If they don?t have insurance coverage, they still may be good for
the judgment. More importantly, a viable operating business doesn?t want to
stop operating, change names, bank accounts and get new stationary and they
probably made some contingency for lawsuits and claims. The
question is, can they pay your claim or judgment? If they are viable, then
their own legal defense is always a consideration.
How can you determine if they are viable?
Start with the Secretary of State Franchise filings. If they have lapsed on
these, that is not a good sign. They may keep their paper work in order and
still not be solvent. The absence and failure to file is a red flag to you that
this business may be unable to fulfill its legal obligations. You can do a
number of business credit checks through entities like Dunn & Bradstreet.
These are usually good only for publicly traded companies. They can tell you
about private companies, but the information is usually stale and not always
What if it is just a small business in a small
town? You can check the real property records to see if they have any real or
more importantly, business property listed. You can either hire a private investigator
or simply ask local business leaders about the business. Bankers will never
tell you directly what they think, but they will indicate in a thousand
different ways what their attitude about the business or the person is. There
are also asset check companies that have limited value, but may direct you to
an account or some other lead.