Q: My son owns a business in the Atlanta, Ga., area. His office manager assumed more financial responsibility than he was supposed to have, and there are outstanding balances of around $200,000 due for things he signed for etc. without my son's knowledge.

A lawyer advised [my son] that a court would probably still hold him liable as he was the owner. He suggested he might want to file business bankruptcy and start a new company in another name (ownership) and later buy it back for himself.

My son is already 52 with health issues due to the stress, and I'm not so sure what the alternatives could be in a situation like this, or what kind of advisor to get for the correct help with these decisions and where to find the person. Any suggestions would be more than appreciated.

A Troubled Mom

A: That's a tough one, but not very rare, I'm afraid. Many business owners, due to being busy doing whatever the nature of their business is, leave the office decisions to their manager or bookkeeper, and poof, there goes the budget. Literally.

Going to a lawyer was the right move, but perhaps this wasn't the right attorney. I'd have to agree that he would most likely be liable for the debts, should he end up in court, but hiding under a new company to sneak back in to buy his bankrupt old business sounds shady.

I would hope your son was given many alternatives, perhaps not relating them all to you. Owning a business in an LLC, Limited Liability Corp., might have protected him, but it's a bit after the fact now. The barn door's open and the horse is already out.

Maybe he can negotiate the bills down. Maybe there's a work-around, keeping him in business so he can pay something back over time. He may have criminal charges to press against his ex-employee, but lots of luck collecting. It's so often not worth the legal fees. A second opinion usually is, though, and if he's not settled with his choices and direction, then that is what he should seek. Truly, the best advisor for this matter is a business attorney. He should consult his CPA as well for advice and referrals. Declaring bankruptcy should be a last resort.

Whatever he does, he needs to breathe deep and get on with his main business, or all will fail. These situations can be all consuming, and the anger, hurt and frustration can lead one to make really bad, emotional decisions.

I must use this unfortunate experience to reiterate an important lesson: Always watch over your money like a hawk. Take the time to learn what you need to look for. Have tight checks and balances in place, and don't relax. When someone has control over your checkbook or credit cards, with little or no oversight, temptation will surely lure the ethically challenged. A little paranoia can go a long way.

Get some sleep, Mom. This will all work out.

Meg Green is a certified financial planner. Mail questions to her c/o Sunday Business, The Miami Herald, 1 Herald Plaza, Miami FL 33132, or send an e-mail to askmeg@MiamiHerald.com. Include your full name and city of residence.

Join the discussion

The Miami Herald is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. In order to post comments, you must be a registered user of MiamiHerald.com. Your username will show along with the comments you post. Thank you for taking the time to offer your thoughts.

     Showing: Oldest first Newest first Most-recommended first Least-recommended first

@Nyx.AuthorDisplayName@ wrote on @Nyx.PostedAtTime@:

@Nyx.repliedToText@

@Nyx.replyAnswerText@

Reply to this Comment @Nyx.Recommender@ @Nyx.AbuseReporter@