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socrateaser, Attorney
Category: Bankruptcy Law
Satisfied Customers: 37862
Experience:  Attorney and Real Estate Broker -- Retired (mostly)
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When filing for personal ch 11 I have purchased and built

Resolved Question:

When filing for personal ch 11:
I have purchased and built My LLC own a property/spec house . LLC obtained a 2TD loan and I have used those funds for personal use. I also made a loan from those funds to 2nd member of LLC.At this point it is an outstanding loan to LLC. Do I need to report money paid from me to another member of LLC as thier liability to me or LLC? Are they described as an insiders ??
Please advice.
Submitted: 7 years ago.
Category: Bankruptcy Law
Expert:  socrateaser replied 7 years ago.

I apologize that no one has responded to this queston. I'm not sure why.


1. Do I need to report money paid from me to another member of LLC as thier liability to me or LLC?


A: To you, because you took personal possession of the funds and then loaned them to another person. The funds are those entirely a personal obligation to the borrower, and the income is personal to you.


2. Are they described as an insiders ??


A: If you mean "insider" for the purposes of bankruptcy law, then under 11 USC 101(31)(A)(iii), a general partner is an "insider." Since an LLC is an entity composed of partners, then it is likely that the 2nd member is an "insider" for purposes of the bankruptcy code.


Hope this helps.


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