Corporate Shell Games: LLPs, LLCs, and Responsibility for Mitigation Sites

Stetson University College of Law Research Paper No. 2009-31

National Wetlands Newsletter, Vol. 31, No. 6, November-December 2009

7 Pages Posted: 3 Nov 2009  

Royal C. Gardner

Stetson University College of Law

Theresa J. Pulley Radwan

Stetson University College of Law

Abstract

Determining who is legally responsible for a wetland mitigation site is not always a straight-forward process. A wetland regulator provided us a portion of a mitigation bank application that referred to a corporation and its officers, an LLP and two LLCs. This article explains what LLPs and LLCs are, and why many mitigation bank operators opt for these business forms. We then walk through the mitigation bank document itself to try to unravel which entity actually would be responsible for the mitigation bank site. The article concludes with recommendations that wetland regulators should consider when evaluating mitigation proposals involving LLPs and LLCs, whether affiliated with a mitigation bank or not. While there is no particular reason to be worried about LLPs and LLCs as compared to traditional corporations, regulators should consider requiring notice for any changes in the ownership and management of these entities. Regulators should also ensure that financial assurances such as letters of credit and performance bonds expressly cover the entity (whether LLP, LLC, or another form) responsible for the mitigation site.

Keywords: wetland, wetland mitigation, mitigation bank, Clean Water Act, business entities, LLC, LLP

JEL Classification: K32

Suggested Citation

Gardner, Royal C. and Pulley Radwan, Theresa J., Corporate Shell Games: LLPs, LLCs, and Responsibility for Mitigation Sites. Stetson University College of Law Research Paper No. 2009-31; National Wetlands Newsletter, Vol. 31, No. 6, November-December 2009. Available at SSRN: https://ssrn.com/abstract=1498780

Royal C. Gardner (Contact Author)

Stetson University College of Law ( email )

1401 61st Street South
Gulfport, FL 33707
United States

Theresa J. Pulley Radwan

Stetson University College of Law ( email )

1401 61st Street South
Gulfport, FL 33707
United States
727-562-7800 x7952 (Phone)

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