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Hi, my name isXXXXX going to try and help.
Technically, a personal bankruptcy should not affect the LLC. The LLC is an individual business entity with its own credit profile.
It might be a good idea to get any accounts in your partners name into the LLC's name.
The bankruptsy court is trying to force a sale
Well, they can force a sale of the partners ownership interest but not the idividual assets of the LLC.
Technically, the partner has a 50percent ownership interst which is in itself a personal asset.
The LLC filing says that any interest sold can only receive future distributions from the LLC but cannot become a member of the LLC unless they are a direct decendent of one of the members.
Might be hard to find a buyer then unless you agree to something different.
There are four members
I see. Then it would requrie agreement of the other member to do something different.
Might be a good time for the other 3 memebers to untie and restructure to a 3 person LLC.
The financial insovancy of the fourth member is a liability.
Would there have to be an appraisal of the interest of the fourth party and how could that be seperated out from the total ownership?
If everyone agrees, no appraisal is needed. Yes, you sepreate the fourth owner. Get together with the other owners and buy him out equally shares....then you will have a 3 member LLC.
Could be as simple as drafting a short sales contract and updating your articles of incorporation with the state.
That helps. The ownership is in a family farm that is non-productive at this time.
I guess not at this time. Thank you.--Shirley
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The ruling was different from BartEsq. answer. It ruled that the LLC could not be divided because of one members financial bankruptcy as his debts were separate and not part of the original intent of the LLC and would cause other members irrepairable financial harm.