Since Limited Liability Corporations (LLC) are a relatively new type of business entity, LLC owners have some difficulty finding out how courts will treat their bankruptcy LLC cases. As an LLC declaring bankruptcy, the owner may get some liability protection since their business is a separate legal entity. However, this protection is not absolute. Why? B ecause as CEO of the legal entity, the owner has fiduciary duties that effectively give them the same liabilities as a sole proprietorship.
On 12.05.09, In Bankruptcy, By admin
On 11.26.09, In Bankruptcy, By admin
In the United States, federal bankruptcy was designed by congress as a relief measure to persons or organizations who are financially distressed. In other words, in the face of insolvency, an individual or organization can find relief against their debt obligations in federal bankruptcy.
Chapter 7 of the federal bankruptcy code provides for the appointment of a trustee for the liquidation of assets of the debtor for orderly distribution to the creditors. When a debtor’s assets are being liquidated, federal bankruptcy code requires that this should be subject to certain exemptions.