LLC members and other persons dealing with LLCs will be interested in a recent Florida Supreme Court case that was decided on June 24, 2010. The court’s decision in Olmstead v. FTC appears to eliminate part of the asset protection feature of single-member LLCs and calls into question the remedies available to creditors of members in multiple-member LLCs.
SMITH v. SIPI, LLC (July 27, 2010)
Receiverships are becoming a popular tool for creditors to manage distressed real estate and to realize upon their collateral. Lenders are looking at receiverships as a faster and more efficient and cost effective strategy than forcing a debtor into bankruptcy. They offer the lender flexibility as opposed to well established procedures under bankruptcy. The current economy is also resulting in increased use of receiverships to complete unfinished buildings.
The automatic stay is one of the most fundamental bankruptcy protections. It enjoins the initiation or continuance of any action by any creditor against the debtor or the debtor’s property, including causes of action possessed by the debtor at time of the bankruptcy filing. The automatic stay offers this protection while bringing all of the debtor’s assets and creditors into the same forum, the bankruptcy court.
A district court rejected the prudent investor rate theory and applied the Pension Benefit Guaranty Corporation (PBGC) discount rate to determine the amount of a PBGC termination liability claim. Wolverine, Procter & Schwartz, LLC v. Lynn F. Riley, 2010 WL 1236298 (D. Mass. 2010). This case demonstrates a recent trend among courts. In the 1990s and 2000s, several courts found that an unfunded benefit liability claim may be recalculated in bankruptcy using a "prudent investor rate" to determine the present value of plan liabilities.
A recent 7th Circuit Court of Appeals decision shows the risks of dealing with an entity known to be insolvent and demonstrates that claimants, however deserving, can expect little sympathy from the courts. (Fusion Capital Fund II, LLC v. Richard Ham and Carla Aufdenkamp No. 09-3723 decided August 2, 2010)
Expect the unexpected from your Web site privacy policy. In a handful of cases, including two which were recently decided, companies have been thwarted in various, unexpected ways by the commitments made in their online privacy policies.
Are your intellectual property litigators reading your privacy policy?
Introduction
In this memorandum opinion, the Court of Chancery granted plaintiffs’ motion to amend their complaint in part, and denied their motion to appoint a receiver for Advance Realty Group, LLC, a Delaware limited liability company (“ARG”) conducting business as a real estate investment and development company. Plaintiffs, all of whom are members of ARG, initially brought claims for breach of fiduciary duty and contract against ARG and the other defendants, which include members of ARG’s managing board (the “Board”), its senior management, and its principal investors.