Insulfoams, Inc., an insulation contractor, filed Chapter 11 bankruptcy in 1989. The company's owners, Dennis and Marion Donaldson, were later sued for breach of fiduciary duty after the case was converted to Chapter 7. The court ruled that a bankruptcy trustee can pursue claims against company owners to recover money for the reorganization plan, even after the initial bankruptcy plan was confirmed. This means owners and officers can be held personally liable for their actions during bankruptcy.
If your company files bankruptcy, owners and officers can be sued personally by the trustee to recover funds—even years later if the case is reopened or converted.