Washington LLC member knowingly receives unlawful distribution - what's the remedy?

The Washington LLC Act prohibits an insolvent LLC from making a distribution to a member. RCW 25.15.235(1). Either type of insolvency will do – the LLC is unable to pay its debts as they come due in the usual course of business, or the LLC’s liabilities exceed the fair value of its assets.

Filed under:
USA, Washington, Insolvency & Restructuring, Litigation, Stoel Rives LLP, Shareholder, Limited liability company, Debt, Liability (financial accounting), Washington Court of Appeals
Location:
USA
Firm:
Stoel Rives LLP
The Washington Court of Appeals clarifies the scope of the single-action rule

In Deere Credit, Inc. v. Cervantes Nurseries, LLC, the Court of Appeals recognized that a parallel bankruptcy proceeding involving multiple creditors is not the same “action” for purposes of RCW 61.12.120’s bar against a plaintiff foreclosing on a mortgage “while he is prosecuting any other action for the same debt or matter which is secured by the mortgage. 

BACKGROUND

Filed under:
USA, Washington, Insolvency & Restructuring, Litigation, Stoel Rives LLP, Bankruptcy, Foreclosure, Liquidation, Washington Court of Appeals
Location:
USA
Firm:
Stoel Rives LLP