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The <i>Ashley Albright </i>Case: A Mixed Message About LLC Business Asset Protection
On April 4, 2003, the United States Bankruptcy Court for the District of Colorado rendered its decision in In re: Ashley Albright, Debtor, Case No. 01-11367 ABC, Chapter No. 7 (2003 Bankr. LEXIS 291). In the case of single-member LLCs, the Albright decision seriously weakens an important LLC business organization law feature often referred to by LLC practitioners as “business asset protection.” In the case of multi-member LLCs, the decision significantly strengthens this feature. As discussed below, the decision has important implications not only in entity formation practice generally but also for the VC/PE community.
First, a word about LLC business asset protection. Since as early as 1890, limited partnership statutes have contained provisions known as charging order provisions. Under these provisions, the judgment creditor of a limited partner debtor in default may obtain an order from a competent court requiring that if the partner's limited partnership determines to make interim or liquidating distributions of its cash or other assets to the partner, it must pay these distributions to the creditor, not the partner, to the extent of the unsatisfied judgment. Many decisions have held and a number of limited partnership statutes, including that of Delaware, expressly provide that charging order provisions are the exclusive remedy of such creditors and that creditors of limited partners who are debtors in default may not force the sale of limited partnership assets in satisfaction of the debt even if the limited partner is the limited partnership's majority owner.
LLC statutes did not begin to appear until many decades after the emergence of limited partnerships, but, with the exception of the LLC acts of Nebraska and Pennsylvania, all U.S. LLC statutes, based as they are on limited partnership law, contain charging order provisions. By contrast, no U.S. corporate statute contains such a provision. The statutory business asset protection that charging order provisions provide to LLC members is a major factor in making the LLC form preferable to the corporate form for most businesses from the viewpoint of nontax choice of entity. (The business asset protection feature of LLC statutes and their limited liability feature must be sharply distinguished. LLC business asset protection operates to protect an LLC's assets when a controlling member is subject to a judgment in the member's personal capacity. LLC limited liability protects the personal assets of LLC members when claims are brought against the LLC.)
Yachts, Jets, Horses & Hooch: Specialized Commercial Leasing Models
Defining commercial real estate asset class is essentially a property explaining how it identifies — not necessarily what its original intention was or what others think it ought to be. This article discusses, from a general issue-spot and contextual analysis perspective, how lawyers ought to think about specialized leasing formats and the regulatory backdrops that may inform what the documentation needs to contain for compliance purposes.
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The ever-evolving digital marketing landscape, coupled with the industry-wide adoption of programmatic advertising, poses a significant threat to the effectiveness and integrity of digital advertising campaigns. This article explores various risks to digital advertising from pixel stuffing and ad stacking to domain spoofing and bots. It will also explore what should be done to ensure ad fraud protection and improve effectiveness.
Turning Business Development Plans Into Reality
This article offers practical insights and best practices to navigate the path from roadmap to rainmaking, ensuring your business development efforts are not just sporadic bursts of activity, but an integrated part of your daily success.