[California Corporations Code Section 2281(b)] to the California Secretary of State) must have obtained a “final civil court judgment, judgment based on an arbitration award, or a criminal restitution order.” Victims of Corporate Fraud Compensation Fund, California Secretary of State (2014).The judgment, based upon an arbitration award or criminal restitution order must have resulted from an action against a corporation involving corporate fraud, misrepresentation or deceit with intent to defraud. Id. The application must be delivered personally or by certified mail to the Secretary of State no “later than 18 months after the judgment has become final.” California Corporations Code Section 2282(b), see also 2 California Code of Regulations Section 22501(b).

In addition to obtaining a final judgment, the claimant must also provide “a description of searches and inquiries conducted by or on behalf of the claimant with respect to each defendant’s assets available to be sold or applied to satisfaction of the judgment, including copies of documentation proving that the claimant has sufficiently pursued collection efforts against all judgment debtors and all other persons liable to the claimant for the fraud that is the basis for the underlying judgment.” 2 California Code of Regulations Section 22502(c).

For purposes of the VCFCF, “‘sufficient collection efforts” may include filing abstracts of judgment . . ., filing a notice of judgment lien, conducting one or more debtor exams . . ., obtaining writs of execution and levying upon assets, or other attempts to find and attach assets for collection.” Id.

Ninety days after the completed application is received by the Secretary of State, a determination whether the application will be granted or denied is made by the Secretary of State and the claimant is notified. Once notified the application has been granted, the claimant has sixty days within which to accept the award or the application will be deemed denied.

To understand the laws, rules and regulations which will enable you to make informed decisions about your company, and how best to do business in California, you need the services of an attorney uniquely qualified to give you that advice. Michael Leonard, Esq. of San Diego Corporate Law, named “Best of the Bar” for 2016 by the San Diego Business Journal, is that attorney. To schedule a consultation with Mr. Leonard to discuss any business-related matter, you can contact him by visiting San Diego Corporate Law or by telephone at (858) 483‑9200.