Banking
May 25, 2018
Bankruptcy and de facto ownership
Several Bankruptcy Courts have allowed trustees to recover property held or transferred by non-debtor third parties via "de facto" ownership holdings.
Stuart B. Rodgers
Lane & Nach, P.C.Phone: (602) 258-6000
Email: stuart.rodgers@lane-nach.com
Stuart practices in the areas of bankruptcy law, civil litigation, tax lien foreclosure and creditors' rights. This article should not be considered or construed as legal advice on any fact or circumstance. You should consult your own attorney regarding your own personal situation or any legal question you may have.
The general rule in most states is that members of a limited liability company have no interest in assets that are the name of the company; therefore, leading many to presume the company's assets are outside the reach of creditors or a trustee in bankruptcy. Several Bankruptcy Courts have allowed trustees to recover property held or transferred by non-debtor third parties via "de facto" ownership holdings that are separate and apart from claims of piercing the corpora...
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