Category: Series LLCs

SERIES LLCS

By , September 28, 2017 1:07 pm

Below are the title and abstract of an interesting law journal article advocating the adoption of series LLC legislation by the roughly 40 U.S. jurisdictions that have not yet done so:

17 J. Bus. & Sec. L. 207
Journal of Business & Securities Law
Spring, 2017
Meredith Pohl
Copyright © 2017 by the Michigan State University College of Law; Meredith Pohl
TAKING THE SERIES LLC SERIOUSLY: WHY STATES SHOULD ADOPT THIS INNOVATIVE BUSINESS FORM

ABSTRACT

The series LLC has gained slow, consistent popularity among states over the past two decades, and this popularity will only continue to grow with the upcoming publication of a Uniform Act. Despite this increase in adoption, there is a dearth of academic literature advising state policymakers of the benefits and risks of adopting the entity form. The series LLC could provide a much-needed economic boost for small businesses in this tough economic climate, growing the state tax base, while increasing efficiency, and decreasing bureaucratic red tape. The series LLC statute ultimately adopted by states should balance pro-creditor and pro-business interests to the fullest extent possible. This balance is best achieved by (1) constructing the statute to minimize risks in bankruptcy for businesses by incorporating many of the equity factors of substantive consolidation into the language, while (2) encouraging bankruptcy courts to adopt a rebuttable presumption of “separateness” to allow creditors a chance to rebut the presumption and recover.

SERIES LLCS

By , March 27, 2017 12:19 pm

Below are (i) a citation to a  law journal article about series LLCs in general and in South Dakota; and (ii) a summary of the article.

61 S.D. L. Rev. 361
South Dakota Law Review
2016
Article
THE SERIES LLC: FURTHER LIMITING LIABILITY WITHIN THE LLC OR CREATING LIABILITY IN THE BUSINESS ORGANIZATION ARENA? ONLY TIME WILL TELL
Heath Oberloh
Copyright 2016 by the South Dakota Law Review; Heath Oberloh

From its origins in Delaware, the Series LLC structure has now been adopted in a handful of states. While the Series LLC provides some unique benefits, those who implement the Series LLC structure encounter a world filled with uncertainties. Some of those uncertainties include whether the internal liability shields between series will be respected, how a series will be treated in the bankruptcy context, how a series will be taxed, and how a series would be treated under the UCC. These uncertainties have been aggravated by the lack of uniformity among the states that have adopted the Series LLC structure. While some attempts at uniformity have been made, planners are currently stuck with the proverbial chicken and the egg conundrum: clarity and certainty may only come with increased use of the Series LLC structure, while increased use may only come with additional clarity and certainty. This article will explain the Series LLC structure and its uncertainties, examine the efforts at uniformity, and explore how the Series LLC could be implemented in South Dakota.

JOURNAL ARTICLE ABOUT UTAH SERIES LLCS

By , January 31, 2017 9:33 am

The article cited below will be of particular interest to Utah lawyers but also to all other lawyers interested in series LLCs and concerned with the risks associated with their use.

29-OCT Utah B.J. 24
Utah Bar Journal
September/October, 2016
Article
UTAH SERIES LLC–THE RISK OF USE CONTINUES TO BE UNCERTAIN
Bruce H. White
Copyright © 2016 by the Utah State Bar; Bruce H. White

NEW BLOG POST RE: TEXAS SERIES LLCS

By , January 18, 2016 9:51 am

The new blog post under the link below provides a good brief discussion of Texas series LLCs.

To repeat what I’ve often written here in the past:  Series LLCs have their uses, but if you form one for a client, you should always first warn them in writing about the risks involved in using them, and you should have your clients sign your warning in acknowledgement of it.

Here’s the link:  http://www.lexology.com/library/detail.aspx?g=18347197-ed3a-46a3-89e7-4dd1e927372f&l=7Q4MA2D.

TENNESSEE SERIES LLCS

By , January 15, 2016 12:39 pm

Members of this group who are licensed in Tennessee may be interested in the article below.

A DECADE OF DOUBT: REVISITING THE TENNESSEE SERIES LLC
Transactions: The Tennessee Journal of Business Law Fall
2015 17 Transactions: Tenn. J. Bus. L. 61
Lindsay M. Johnson , William N. Lay

SERIES LLCS

By , December 10, 2015 10:31 am

Series LLCs are hot in the LLC world, but they are dangerous to use even in states whose LLC acts authorize series LLCs.  If you use them for your clients, you should first comprehensively warn your clients in writing about the risks involved in using series LLCs, and you should have your clients sign these warnings in acknowledgement of them.

Below is a cite to a new law journal article that addresses one of the many areas of risk involved in using series LLCs:

46 No. 4 UCC L. J. ART 1
UCC Law Journal
Volume 46, Issue 4
November 2015
Professor Louis F. Del Duca
Uniform Commercial Code Law Journal
Dissonance in the Attempt to Harmonize LLC Series and Article 9

TEXAS SERIES LLCS

By , September 2, 2015 10:56 am

Here is a cite to an article about how to use Texas series LLCs in real estate deals.  I suspect it also contains some good ideas for non-Texas LLCs:

Weller, “Modern Real Estate Transactions: Series LLCS,” SX008 ALI-CLE 1175, The American Law Institute Continuing Legal Education (Jul. 22-24, 2015).

SERIES LLCS AND THE ACA EMPLOYER MANDATE

By , August 15, 2014 11:48 am

Here is a cite to a just-published article about Texas series LLCs and the ACA employer mandate:

McFadin, Scott, You Can’t Always Count How You Want: Why Texas Series LLCs Do Not Offer A Unique Advantage To Employers Who Wish To Avoid The Affordable Care Act’s Employer Mandate,  Texas Tech Law Review, Summer 2014

I haven’t read the article yet, but I suspect it will be relevant not only to Texas lawyers but also to all other lawyers and accountants who are interested in either the ACA or series LLCs.

EXCELLENT NEW ARTICLE ABOUT FIFTH CIRCUIT FAILURE TO ADDRESS IMPORTANT QUESTIONS ABOUT DELAWARE SERIES LLCS

By , May 28, 2014 7:25 am

My view is that, with narrow exceptions, it’s irresponsible for lawyers to recommend to their clients to form series under Delaware LLC series law if there’s any risk that the client will be sued outside Delaware.  Below is the citation of an excellent law journal article about a recent failure of the Fifth Circuit to address key Delaware series legal issues.  The bottom line of the article for ordinary practitioners is this:  The many major unanswered legal and tax questions about Delaware series LLCs remain unanswered.

Here’s the cite:

2014-APR Bus. L. Today 1
Business Law Today
April, 2014
FIFTH CIRCUIT MISSES OPPORTUNITY TO BRING CLARITY TO SERIES LLC QUESTIONS
Allen Sparkman

NEW LAW JOURNAL ARTICLE ON SERIES LLCS

By , May 19, 2014 8:33 am

Those of you who are interested in the highly controversial topic of series LLCs may be interested in the following newly published law journal article:   Justin Fezzi, “Third Time’s a Charm: How the Uniform Law Commission Can Fit Series LLCs Into The Uniform Limited Liability Company Act,” 58 St. Louis U. L.J. 911 (Spring 2014).