Business Law Today, Feb. 2013, p. 1-4.
5 Pages Posted: 29 Mar 2013
Date Written: February 1, 2013
Entity choice law is constantly evolving and innovating. The series LLC form is one such example. Although the form provides governance and operational flexibility and efficiencies, the law governing the form is still developing. As such, uncertainties linger, particularly in the context of a financially distressed or insolvent series. This article explores many of the issues that arise when a master LLC or one of its series experiences financial distress and contemplates a bankruptcy filing. It also identifies strategies for parties to potentially mitigate certain of these issues in the planning stage. The article concludes by suggesting parties using the series LLC form consider its overall impact on the business plan and objectives, including potential negative consequences on the rights and remedies of owners and certain creditors and on the cost of capital.
This information or any portion thereof may not be copied or disseminated in any form or my any means or downloaded or stored in an electronic database or retrieval system with the express written consent of the American Bar Association. Reproduced with permission of the American Bar Association.
Keywords: Limited Liability Company, financial distress, reflief, U.S. Bankruptcy Code
Suggested Citation: Suggested Citation
Harner, Michelle M. and Ivey-Crickenberger, Jennifer Lynn and Kim, Tae, Series LLCs: What Happens When One Series Fails? Key Considerations and Issues (February 1, 2013). Business Law Today, Feb. 2013, p. 1-4.; U of Maryland Legal Studies Research Paper No. 2013-17. Available at SSRN: https://ssrn.com/abstract=2240268