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Civil claims have their foundation in tort law, particularly in conversion and fraud. Tiffany had a fiduciary obligation to the company as a bookkeeper, thus it is also possible to argue that there was a violation of that duty.

Chapter 11 Bankruptcy:

In the event that Javier's Very Hot Sauce! is an LLC, Chapter 11 bankruptcy may be the most suitable structure. Chapter 11 permits the company to continue operating while restructuring its debts. This would provide a chance for financial recovery and restructuring, especially because there is a chance for national expansion.

How Bankruptcy Affects Personal Property