My Father has organized an LLC with all his kids as members and interest holders. The Trustee has threatened to collapse the LLC in order to access my interest in it. Can she do that? What authority does she have to ruin it for everyone else?
-
-
Filing of BK gives the Trustee access to assets. It is the Trustees job (in an asset case) to liquidate the debtor's nonexempt assets.
I believe you have the right to pay the Trustee the value of the non-exempt asset to retain that asset.8-07-09-filed Chapter 7
11-18-09-DISCHARGED!!
Life is not what challenges you face, but how you face those challenges. -
Your Trustee has stepped into your shoes as it relates to the membership interest you owned. She gets no greater rights than you. Her interest in the LLC is governed by the Operating Agreement. If you were a limited member then she is a limited member. If your membership interest was only 10 % then her membership interest is only 10%. As long as you did not have a controlling interest in the LLC the only thing she can do is sell your/her membership interest. Normally a Trustee will offer to sell it to you or the other members before she tries to sell it on the "open market".
The Trustee is trying to extort $$ from you. In some cases I will call the Trustee's bluff since I know the interest has no value and the other members are not going to purchase it. When I do call the bluff the Trustee typically abandons the membership interest and the ownership of the interest is returned to my client. However, the fact is, the Trustee has the right to sell the interest so calling the bluff is always a risk. On the other hand, the debtor can show up at the "auction" and bid on the asset.
Having said all of the above, what was your interest in the LLC and what rights did you have? Is the interest worth anything? Would someone buy it?
Des.Comment
Comment