Legal Question in Bankruptcy in United States

Could bunckropsy of LLC effect me as the owner. I never gave any personal garanties but I was responsible for undersign the company documents. Thank you.

Asked on 10/01/16, 5:36 pm

4 Answers from Attorneys

R. Jason de Groot R. Jason de Groot, P.A.


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Answered on 10/01/16, 5:46 pm
Terrence Thorgaard Thorgaard Law Firm

What do you mean "undersign"? I assume you mean something like _____, LLC, by [your name], [your title]. If so, while your interest in the LLC may be worthless after the bankruptcy, you probably are not personally liable for the debts of the company.

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Answered on 10/01/16, 6:42 pm
JAY Nixon nixon law offices

As a practical matter, business owners rare escape personal bankruptcy when their businesses go under. While the most common form of owner personal liability is personal guarantees (which many of my clients were no aware they were signing when they signed sales invoices or product delivery documents) other personal liabilities can include preference or fraudulent conversion claims from the trustee of a business which has filed bankruptcy, or dissolution liability which can asses corporate debts against owners to the extent that they have received corporate funds or assets of the life of the corporation. For these reasons, I rarely recommend that owners formally bankrupt corporations of LLC's rather than simply ceasing operations or the entity, followed by a personal chapter filing.

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Answered on 10/03/16, 4:02 am
Thomas Zimmerman Zimmerman Law Office

It depends. If you followed all requirements for limited liability in forming the LLC, and elected to limited liability, then you are not liable merely because your are a member or manager. Many vendor agreements have personal guarantees built in. Each has to be evaluated. Of course there are other theories of liability other than contract. They include fraud, unjust enrichment, fraudlent transfer. Generally speaking, tax liabilities are not discharged. You must consult and retain a bankruptcy lawyer.

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Answered on 10/03/16, 7:10 am

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