Category: Bankruptcy

LLC BANKRUPTCY

By , September 15, 2016 8:51 am

Over time, one or more of our LLC clients may go bankrupt.  If they do, can a bank provide in the LLC’s operating agreement that the LLC may not file for bankruptcy except with the bank’s consent?  According to the very recent decision of the Delaware bankruptcy court, discussed in the post under the link below, the answer is no.

Here’s the link:  http://www.lexology.com/library/detail.aspx?g=2b11d4bd-476d-4136-8dc6-9ca097c4945a&l=7SEHPUL

NEW ARTICLE ON SERIES LLCS AND BANKRUPTCY

By , April 7, 2016 1:54 pm

Lawyers who form series LLCs for their clients under the laws of their own or other states may find interest in the article below.

35-MAR Am. Bankr. Inst. J. 24
American Bankruptcy Institute Journal
March, 2016
SERIES LLCS: CAN A SERIES FILE FOR BANKRUPTCY, AND WHAT IF IT DOES?
Steven J. Boyajian
Robinson & Cole LLP
Providence, R.I.
Copyright © 2016 by American Bankruptcy Institute; Steven J. Boyajian

ARTICLE ON WHETHER BANKRUPTCY ESTATES CAN LIQUIDATE PARTIAL INTERESTS LLCS

By , November 10, 2015 3:31 pm

The article cited below will be of interest to lawyers working with bankruptcy estates holding fractional interests in LLCs.

34-OCT Am. Bankr. Inst. J. 32
American Bankruptcy Institute Journal
October, 2015
CAN AN ESTATE EFFECTIVELY LIQUIDATE A FRACTIONAL INTEREST IN AN LLC?
Richard J. Mason
McGuireWoods LLP
Chicago
Patricia K. Smoots
McGuireWoods LLP
Chicago
Copyright © 2015 by American Bankruptcy Institute; Richard J. Mason, Patricia K. Smoots

BANKRUPTCY

By , August 24, 2015 11:35 am

If you’re forming LLCs for your clients, you have to know what is likely to happen to LLCs and their members when the LLCs or one or more members go bankrupt.  For one thing, the answer is likely to involve LLC statutory pick-your-partner provisions and charging order provisions, which are key provisions in any LLC act—and which you and your clients need to understand.

The new blog post under the link below talks about a key issue that often arises when an LLC goes bankrupt.  The blogger is Tom Rutledge, a national leader in the field of LLC law and practice.

http://kentuckybusinessentitylaw.blogspot.com/2015/08/court-holds-that-bankruptcy-trustee.html