QUESTION

I'm a minority owner in an LLC (15%). How can I leave the LLC (transfer my equity) so that creditors will not go after my personal assets?

Asked on Jun 21st, 2018 on Bankruptcy - New York
More details to this question:
We are a New York State LLC. An LLC (4 members, 60%, 10%, 15%, 15%) files for bankruptcy. We are vulnerable to creditors โ€œpiercing the corporate veilโ€ because there have been mixing of personal and business accounts. 1) All the remaining business debt, does it get distributed evenly to all the members, or proportionately, or only to the majority? 2) Post filing for bankruptcy, can a creditor go after the minority members if they have not gotten all their debt paid from the majority member? 3) If a minority member decides to leave the LLC before the company files for bankruptcy, could their personal assets still be targeted because of their previous involvement, or are they totally clear?
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1 ANSWER

Estate Planning Attorney serving New York, NY
1 Award
Without the commingling, leaving before bankruptcy would leave you likely totally clear.  The commingling is a problem.  Bankruptcy is not a good idea if there has been commingling.  It makes veil piercing easier, not harder.  Get better legal advice.
Answered on Jun 26th, 2018 at 6:50 AM

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