Filing a LLC bankruptcy

[kaithap]

Three of us opened a LLC to open up a Restaurant Business. Now its a failure. We want to file bankruptcy. Does this effect our personal credit ? ?
If it affects our personal credit history whats the way to get out of it. We dont have funds to get out of the lease and landlord doesnt agree to termenate the lease. We have not taken out any loans. Just because of the landlord not aggreeing to terminate the lease we are in serious problem.
Thanks for Help.

[ready2puke]

Wow what a jerk...you'd think this you cant pay the rent, whats he going to get out of it, if you guys BK? Karma will get him thats for sure. I dont know about LLC's but I think it should protect you in BK.. Isnt that what is all about anyway?

[justbroke]

The LLC, as an entity, would file for Bankruptcy. An LLC can't file Chapter 13, but can file under Chapter 7 (or Chapter 11).

I suppose you want to dissolve the business? So, you'd file a Chapter 7. You liability will be limited to what you "personally guaranteed" through the LLC.

So, if you personally guaranteed debt, then you could be responsible. If the debt was performed under the Corporation (LLC) name, then you would be okay.

Example, say you personally signed the lease as a guarantor, then you are liable. However, if you signed as Secretary of the Corporation... and didn't give a personal guarantee, then you'd be free and clear.

At least, that's how I understand it. I use to operate an S Corporation, which is different in some liability aspects.

For those reasons, you may need to file Bankruptcy personally, as well as the Business filing.

[kaithap]

I signed a lease as a LLC member. I didnt personally guarantee anything. In that case I think I am not liable for anything Right?

[justbroke]

I signed a lease as a LLC member. I didnt personally guarantee anything. In that case I think I am not liable for anything Right?

Depends HOW the lease READS.

If the lease reads that "I, the undersigned, do hereby guarantee, or, acting as guarantor, do hereby enter into this lease..." or something similar... you're toast.

You need to look at the lease agreement. You need to have a lawyer review it to determine your liability from having signed it.

When you signed it, did you put your "title" on it? Did all members of the LLC sign it? The latter, would tend to indicate that it's a personal guarantee. However, only a good lawyer could determine, from the context and other paragraphs in the lease, what your personal liability is.

[kaithap]

It reads like this:
This lease is made as of this____ day of 2008 by and between ABC LLC, 123 Fedrick st, OH 12345 (Landlord) and Jacks foods LLC (tenant),
And for in consideration of the mutual promises and agreement herein after set forth, landlord and tenant agree as follows.

And on last page where I signed it read as:

In witness hereof, the parties have exceuted duplicate counterparts of this lease.

ABC LLC. Jacks Foods LLC
BY___________ By_____________
Name________ Name____________
Office________ Office____________
And I signed the lease and put member on my office.

[BKOnce]

Trustee : OK, you're FREE to go sir!

[justbroke]

It reads like this:
This lease is made as of this____ day of 2008 by and between ABC LLC, 123 Fedrick st, OH 12345 (Landlord) and Jacks foods LLC (tenant),
And for in consideration of the mutual promises and agreement herein after set forth, landlord and tenant agree as follows.

And on last page where I signed it read as:

In witness hereof, the parties have exceuted duplicate counterparts of this lease.

ABC LLC. Jacks Foods LLC
BY___________ By_____________
Name________ Name____________
Office________ Office____________
And I signed the lease and put member on my office.

Excellent. You signed it as the LLC and not yourself!!!

Very nice. Most people aren't that astute (landlord or tenants). Had you signed a personal guarantee or signed it as a guarantor, you'd be toast.

However, my plain, simple, layman's read of where you signed, and given that they asked for your "Office" (or title), that indicates your signed as the Corporation!

C'est la vie!