Carter G. Bishop (Suffolk) has posted on SSRN "Reverse Piercing: A Single Member LLC Paradox," an article forthcoming in the South Dakota Law Review. Bishop’s focus is on the rise of single member LLCs (SMLLCs) as an asset-protection vehicle, and the resulting difficulties of creditors of the single member under existing LLC law. He suggests that, in lieu of "ad hoc equitable judicial remedies," id. at 6, the states should take the SMLLC off the table as an asset-protection vehicle:
every state would amend its SMLLC legislation to provide that upon the voluntary or involuntary transfer of the only economic interest in the SMLLC, the transferee will be admitted as a substituted member, with or without the consent of the only member.
Id. at 70.
On the Florida Asset Protection blog, Jonathan Alper notes that, in FTC v. Olmstead, the remedies of creditors of the sole member of an SMLLC are now before the Florida Supreme Court via a certified question. He has a recent post on the oral arguments in FTC v. Olmstead.
There also has been an interesting discussion of this on LNET-LLC.
Hat tip to Paul Caron.
posted by Gary Rosin
This entry was posted on Wednesday, February 18th, 2009 at 11:44 am and is filed under Commentary, LLCs, Scholarship. You can follow any responses to this entry through the RSS 2.0 feed.
You can leave a response, or trackback from your own site.
Reverse Piercing: A Single Member LLC Paradox
Carter G. Bishop (Suffolk) has posted on SSRN "Reverse Piercing: A Single Member LLC Paradox," an article forthcoming in the South Dakota Law Review. Bishop’s focus is on the rise of single member LLCs (SMLLCs) as an asset-protection vehicle, and the resulting difficulties of creditors of the single member under existing LLC law. He suggests that, in lieu of "ad hoc equitable judicial remedies," id. at 6, the states should take the SMLLC off the table as an asset-protection vehicle:
Id. at 70.
On the Florida Asset Protection blog, Jonathan Alper notes that, in FTC v. Olmstead, the remedies of creditors of the sole member of an SMLLC are now before the Florida Supreme Court via a certified question. He has a recent post on the oral arguments in FTC v. Olmstead.
There also has been an interesting discussion of this on LNET-LLC.
Hat tip to Paul Caron.
posted by Gary Rosin
This entry was posted on Wednesday, February 18th, 2009 at 11:44 am and is filed under Commentary, LLCs, Scholarship. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.