Jeff-Johnson

Putting Your Family First.

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Texas Family Law

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Family Law

High Stakes Divorce Cases – Johnson McNulty

Protecting Your Rights: Uncovering Wasteful Spending in Divorces Involving Family Businesses

Divorce is rarely straightforward, but when a family business is involved, the complexities increase tenfold. As the spouse of a business owner, you might feel left in the dark when it comes to understanding the financial aspects of your divorce. Often, businesses can be used as a vehicle for wasteful or unauthorized spending, which can drastically impact the fair division of marital property. At Johnson McNulty, we have extensive experience helping spouses like you identify and litigate waste claims against a business-owning spouse.

What Are Waste Claims?

In Texas, waste claims arise when one spouse uses community assets for personal benefit in a way that depletes the marital estate, often without the other spouse’s knowledge or consent. When a business is involved, opportunities for unauthorized spending can multiply, making it challenging to get a clear picture of what assets truly belong to the marriage.

Common Examples of Wasteful Spending

Business-owning spouses can use their position and financial control to engage in several forms of wasteful or unauthorized spending, including:

  • Spending on an Affair: It’s not uncommon for a spouse to use business resources to fund an extramarital affair, whether by paying for hotels, vacations, gifts, or even financial support for the affair partner.
  • Substance Abuse and Excessive Partying: Excessive expenditures on drugs, alcohol, or extravagant nightlife activities such as visits to strip clubs or expensive bars can constitute wasteful spending, particularly when these expenditures have no benefit to the marital estate.
  • Transferring Money to Family Members or Friends: Business owners may also transfer community assets to family members or friends under the guise of loans, gifts, or business expenses. This tactic not only reduces the value of the marital estate but also complicates recovery if the transfers are not well-documented.
  • Gambling and Risky Investments: If a business-owning spouse is using business funds for gambling or engaging in high-risk investments that don’t benefit the community estate, this can be considered a form of waste.
  • Hidden Perks and Personal Benefits: Diverting funds to non-business-related purchases like luxury vehicles, boats, or extravagant personal expenses and disguising them as business costs is another common tactic used to diminish the marital estate.

When you suspect that your spouse has been engaging in wasteful spending, it’s essential to work with a family law firm that understands these tactics and knows how to prove waste claims in court.

Why Experience Matters

Waste claims are complex. They require a deep understanding of financial records, tax filings, and business operations. Our firm specializes in untangling these intricate financial webs to ensure you receive what you’re entitled to. With our experience, we know where to look and what questions to ask to uncover unauthorized spending.

At Johnson McNulty, we have successfully represented numerous spouses in high-stakes divorce cases involving closely held businesses. Our team works with financial experts, including forensic accountants, to trace hidden expenditures and hold your spouse accountable.

How We Help

  1. Forensic Analysis: We work with forensic accountants to analyze business records and uncover any discrepancies. This detailed review can reveal unauthorized spending and hidden assets.
  2. Strategic Planning: We create a comprehensive legal strategy tailored to your unique circumstances, designed to maximize your claim and protect your interests.
  3. Proactive Representation: Our team aggressively pursues waste claims, pushing for full transparency and accountability from the business-owning spouse.

Trust Johnson McNulty to Protect What’s Yours

When your financial future is at stake, you need a law firm that knows how to navigate the complexities of family businesses and waste claims. At Johnson McNulty, we have the experience, knowledge, and resources to ensure you are treated fairly in your divorce. Our team understands the tactics business owners may use to hide assets or waste marital property, and we are here to stand up for you.

If you suspect your spouse is using the business to conceal unauthorized spending, don’t leave your future to chance. Contact us today to schedule a consultation and learn how we can help protect your rights and secure the fair division of your marital estate.

Piercing the Corporate Veil in Texas Divorces: Protecting Your Interests in Separate Property Entities

In Texas divorces, the presence of a business entity often raises complex questions regarding ownership, asset valuation, and asset division. One crucial legal principle that may come into play is the concept of piercing the corporate veil. When one spouse owns an entity that claims separate property status, piercing the corporate veil can significantly impact the community estate and the fair division of marital assets.

Understanding the Corporate Veil

The corporate veil is a legal principle that protects the owners, shareholders, or members of a corporation or limited liability company (LLC) from being personally liable for the debts and obligations of that entity. This veil serves to keep the business and its assets legally separate from the owners’ personal assets. When a business owner claims that a company is their separate property, this protection extends to prevent the company’s assets from being considered community property.

However, the protection of the corporate veil is not absolute. In situations where the business has been misused or there is evidence of improper conduct, Texas courts may decide to pierce the corporate veil, allowing the company’s assets to be included in the marital estate.

The Legal Principles of Piercing the Corporate Veil in Texas

Piercing the corporate veil is a legal maneuver that requires proving that the business was not genuinely separate from its owner. In Texas, courts are cautious about piercing the veil, but they may allow it in cases of:

  1. Fraud or Misrepresentation: If one spouse uses the business to defraud the other or to conceal marital assets, a court may pierce the veil to expose those assets.
  2. Undercapitalization: When a business is intentionally underfunded to shield assets from a spouse or creditors, courts may determine that the entity is a mere facade and pierce the veil.
  3. Failure to Observe Formalities: Texas law generally does not require corporations or LLCs to follow strict corporate formalities to maintain veil protection. However, in egregious cases where business and personal finances are completely commingled or where there is no distinction between the owner and the business entity, veil-piercing may be warranted.
  4. Alter Ego Doctrine: If the business operates merely as an extension of the owner’s personal activities rather than a distinct legal entity, courts can pierce the veil under the alter ego doctrine.

Consequences for the Marital Community

If the court pierces the corporate veil of a separate property business entity, the assets within that business may be reclassified as community property. This means that business profits, cash reserves, investments, and other assets owned by the entity could be subject to division between the spouses. For the non-business-owning spouse, this could provide a significantly larger share of the marital estate, ensuring that they receive a fair division of the property.

However, for the business-owning spouse, the piercing of the corporate veil can lead to a loss of business control and exposure to additional financial liability. This complex and high-stakes scenario demands sophisticated legal counsel with in-depth experience in veil-piercing litigation.

Contact Us

Our Expertise in Veil-Piercing Cases

At Johnson McNulty, we have extensive experience representing both spouses seeking to pierce the corporate veil and those defending the corporate veil of a separate property entity. These cases require deep knowledge of corporate law, family law, and financial analysis. Successfully piercing or defending the corporate veil hinges on a thorough understanding of the legal principles, a strategic approach to evidence collection, and expert witness testimony when necessary.

Strategic Case Analysis

We work closely with financial experts and forensic accountants to review financial records, corporate documents, and business practices to build or defend against veil-piercing claims.

Experienced Litigation

With our experience, we know how to present or refute evidence of fraud, alter ego issues, and other improper business practices that could justify piercing the corporate veil.

Why You Need Experienced Legal Counsel

Piercing the corporate veil is a highly complex and technical legal maneuver that should only be handled by a law firm with deep experience in both family law and business law. Successfully navigating these cases requires a lawyer who understands the interplay between business entities and marital property division, the specific legal standards in Texas, and the strategic nuances of veil-piercing litigation.

If you are involved in a divorce where there is the potential to pierce the corporate veil, it is crucial to hire an attorney who has a demonstrated track record in these claims. At Johnson McNulty, we offer the experience, strategy, and resources to effectively protect your interests.

Contact us today to schedule a consultation and learn how we can help you navigate the complexities of piercing or defending the corporate veil in your divorce. With our comprehensive understanding of Texas family law and corporate law, you can trust us to protect what’s rightfully yours.

TRUSTED & VERIFIED.
Put our legal team on your side in negotiations and in court. Call Johnson McNulty at 817-576-6537.

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Reviews

Good
Based on 23 reviews
Megan Williams
Megan Williams
2022-09-17
I can’t say thank you to Jeff, Chloe, and Lupe at Johnson, Loyd & Schmitz, PLLC enough. Jeff’s skillful practice in the courtroom, cognizant strategies to decrease financial burdens, and everyone’s time and diligence in preparation have been amazing. They always answer phone calls and emails with a quick and knowledgeable response. The whole office has been very kind and empathetic towards me despite my sometimes exhausted and emotionally wrecked communications. The whole group shows that they truly care and fight for their families. I can’t recommend this group enough. So very thankful for them!!
Miss Muggwamp
Miss Muggwamp
2022-09-05
Easy location to find. Very friendly & helpful. Great attorneys especially D. Wright. Ive known him for over 20 years He has the experience you need for all areas of laws - civil, probate and family. He and the other attorneys plus support staff we're very sympathetic while assisting me in probating my parents estate.
Dwayne Belkowski
Dwayne Belkowski
2022-01-23
Best attorneys in town for Family law. Highly recommend.
Larry Wuzhere
Larry Wuzhere
2019-03-30
A few months ago I found myself to be a target of the one of the most oppressive and powerful entities in the Texas government- The Office of the Attorney General- Child Support Division. This out of control entity has little to no oversight and is empowered to wreck lives with NO REPERCUSSIONS. I tried to find someone in the OAG management to help correct the situation but that only escalated the attack against me and my livelihood. They seized my bank accounts and and placed liens against my property. Fortunately for me I turned to the law firm of Johnson, Loyd and Schmitz. Mr. Johnson put together a legal plan of action and moved quickly to provide relief to my situation. I put my trust and future into his hands, and just as David slew the Mighty giant Goliath-so Mr Johnson brought the mighty Office of the Attorney General to its knees. My life and property are now secure from improper confiscation and harassment from this entity. Thank you Mr Johnson you were truly a God send when my future was bleak at best. A grateful client, Larry Morris
Virgil Martinez
Virgil Martinez
2019-03-05
I recently was looking for a family law attorney and sent in a request for consultation with Johnson, Loyd, & Schmitz. I was contacted by Jeff who was amazing. He wasn't pushy and he was extremely personable. He guided me and gave me the advice I needed. I would recommend anyone to call on this team if they are in need of legal services. Thank you guys and if I need any legal services again I will be coming back!

* Johnson Loyd & Schmitz was a previous law firm that is now Johnson McNulty, Attorneys At Law.