Legal Question in Bankruptcy in Kentucky

Bankruptcy and a family business

I am a small business owner and I own a business with my sister. She may be in the process of filing for bankruptcy, and I want to know if they file can the trustee come after the business.

Every dime I have has been invested in the company, my savings and every free penny I can spare. I am our biggest shareholder, and have the most to lose financially. They only brought in the tools, or the tools not bought by the company.

We are a LLC, and about 8 months old. We are still struggling. Can someone help me and tell me what my options are? I am in Kentucky.


Asked on 2/19/09, 12:12 am

1 Answer from Attorneys
Gregory Napier Troutman & Napier, PLLC

Re: Bankruptcy and a family business

This is potentially more complicated than I can explain here, but I will hit the highlights. If your sister is only filing as an individual, then her ownership interest in the company is an asset that belongs to her. If she files a Chapter 7, then it is an asset that comes into the estate. The Trustee will look at this asset and determine if it is worth taking and selling to distribute the proceeds to unsecured creditors. She may have sufficient wild-card exemption to cover this asset or her interest may not be worth enough on its own for the Trustee to fool with. If she files a Chapter 13 then there is less to concerned about.

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Answered on 2/19/09, 12:19 pm


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