Jul06

Right to petition for dissolution of LLC was noneconomic interest included in debtor-member’s Chapter 11 estate.

by Admin on July 6th, 2008
Posted In: Uncategorized

A clause in an operating agreement for a limited liability company (LLC), indicating that a member of the LLC would cease to be a member upon his or her filing of a voluntary dallas bankruptcy petition, did not serve to prevent a founding member of the LLC who subsequently filed for Chapter 11 relief from commencing a proceeding to compel the LLC’s dissolution, upon the theory that, having ceased to be a member with the filing of his Chapter 11 petition, he no longer had standing to seek the LLC’s dissolution. The debtor’s right to petition for dissolution was a noneconomic interest in the LLC, which members of the LLC, by inserting this clause in the operating agreement, could not prevent from being included in the “property of the estate.”

Related posts:

  1. Court determines debtors’ state law exemption rights by counting backward in calendar dates from filing of petition.
  2. Chapter 13 plan of debtor who had no increase in her income during postpetition, preconfirmation period could be confirmed.
  3. A Look at Chapter 13 Bankruptcy