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The <i>Ashley Albright </i>Case: A Mixed Message About LLC Business Asset Protection
On April 4, 2003, the United States Bankruptcy Court for the District of Colorado rendered its decision in In re: Ashley Albright, Debtor, Case No. 01-11367 ABC, Chapter No. 7 (2003 Bankr. LEXIS 291). In the case of single-member LLCs, the Albright decision seriously weakens an important LLC business organization law feature often referred to by LLC practitioners as “business asset protection.” In the case of multi-member LLCs, the decision significantly strengthens this feature. As discussed below, the decision has important implications not only in entity formation practice generally but also for the VC/PE community.
First, a word about LLC business asset protection. Since as early as 1890, limited partnership statutes have contained provisions known as charging order provisions. Under these provisions, the judgment creditor of a limited partner debtor in default may obtain an order from a competent court requiring that if the partner's limited partnership determines to make interim or liquidating distributions of its cash or other assets to the partner, it must pay these distributions to the creditor, not the partner, to the extent of the unsatisfied judgment. Many decisions have held and a number of limited partnership statutes, including that of Delaware, expressly provide that charging order provisions are the exclusive remedy of such creditors and that creditors of limited partners who are debtors in default may not force the sale of limited partnership assets in satisfaction of the debt even if the limited partner is the limited partnership's majority owner.
Why So Many Great Lawyers Stink at Business Development and What Law Firms Are Doing About It
Why is it that those who are best skilled at advocating for others are ill-equipped at advocating for their own skills and what to do about it?
Bankruptcy Sales: Finding a Diamond In the Rough
There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.
The DOJ's Corporate Enforcement Policy: One Year Later
The DOJ's Criminal Division issued three declinations since the issuance of the revised CEP a year ago. Review of these cases gives insight into DOJ's implementation of the new policy in practice.
A Lawyer's System for Active Reading
Active reading comprises many daily tasks lawyers engage in, including highlighting, annotating, note taking, comparing and searching texts. It demands more than flipping or turning pages.
Blockchain Domains: New Developments for Brand Owners
Blockchain domain names offer decentralized alternatives to traditional DNS-based domain names, promising enhanced security, privacy and censorship resistance. However, these benefits come with significant challenges, particularly for brand owners seeking to protect their trademarks in these new digital spaces.