In order to obtain limited liability, Tony and Daryl formed a S Corporation to operate their hardware store Burien Hardware. Both Tom and Daryl sometimes directly deposited the proceeds from Burien Hardware’s daily sales into their personal checking accounts. When they needed to pay personal bills and were short of funds, Tom and Daryl used the Burien Hardware business checking account to pay those personal bills. Burien Hardware has not made any payments to their various creditors for over three months. If Burien Hardware’s creditors cannot get payment for their invoices, is there anything a court can do to help those creditors? What if any mistakes did Tom and Daryl make with the creditors of Burien Hardware? Going forward, how can Burien Hardware keep its limited liability?
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