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Richard - Bizlaw
Richard - Bizlaw, Attorney
Category: Legal
Satisfied Customers: 10585
Experience:  30 years experience corporate, litigation, international
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if a bank sue my llc while i began to form other llc in my

Customer Question

if a bank sue my llc while i began to form other llc in my spouse and children name and transfer some assets is that an alternative that i have?
Submitted: 6 years ago.
Category: Legal
Expert:  Richard - Bizlaw replied 6 years ago.

If you transfer assets from the old to the new LLC, the bank will be able to follow those transferred assets into the new LLC. Only if you paid fair value from the new LLC to the old LLC for the assets transferred can you avoid this result.

This communication is not intended as legal advice. A local attorney should always be consulted for legal advice. No client/attorney relationship is intended or created by this communication.

Customer: replied 6 years ago.
Could you please explain what do you mean by Only if you paid fair value from the new LLC to the old LLC for the assets transferred can you avoid this result
Expert:  Richard - Bizlaw replied 6 years ago.

Lets suppose you have a piece of equipment worth $10,000. If you transfer it to the new company without paying the old company anything the bank will be able to pursue the new company for the piece of equipment. However, if the new company pays the old company $10,000 for the piece of equipment, the bank cannot pursue the new company because the old company was paid the fair value of the asset.

This communication is not intended as legal advice. A local attorney should always be consulted for legal advice. No client/attorney relationship is intended or created by this communication.

Customer: replied 6 years ago.
If the assets from the old LLC are in 3 to 4 different states can the bank still trace them? and what a judgement againest the llc mean? Why did the bank follow suing me instead of filing for foreclosure? can we negociate that they satisfy the debt by geting to forclose on the buildings?
Expert:  Richard - Bizlaw replied 6 years ago.

The bank can follow the assets where ever they are or are transferred. The bank sued you without going to foreclosure if you personally guaranteed the loan. Whether the bank will agree to the foreclosure first rather than pursuing you personally is a matter of negotiation. You cannot force them to do so unless you guarantee requires them to pursue the assets first before you on your guarantee.

This communication is not intended as legal advice. A local attorney should always be consulted for legal advice. No client/attorney relationship is intended or created by this communication.

Customer: replied 6 years ago.
If a bank sue my llc while I began to form other llc in my spouse and children name and transfer some assets is that an alternative that I have?If the assets from the old LLC are in 3 to 4 different states can the bank still trace them? and what a judgement againest the llc mean? Why did the bank follow suing me instead of filing for foreclosure? can we negociate that they satisfy the debt by geting to forclose on the buildings? If the assets from the old LLC are in 3 to 4 different states can the bank still trace them? and what a judgement againest the llc mean? Why did the bank follow suing me instead of filing for foreclosure? can we negociate that they satisfy the debt by geting to forclose on the buildings?
Expert:  Richard - Bizlaw replied 5 years ago.

Let's recap. The bank sues the LLC for money owed. If the LLC tries to avoid paying the bank by transferring its assets to another LLC for no money that is called a fraudulent conveyance. If there is a fraudulent conveyance the creditor can recover the assets from the LLC to which they were transferred as well as all its costs including attorneys fees for having to find the transferred assets. You as the owner who did the fraudulent conveyance would be personally liable for the costs to the bank arising from the fraudulent conveyance.

 

If you guaranteed the bank debt under what is called a guaranty of payment, the bank could sue you at the same time as the LLC or even without suing the LLC. Only if you have a guarantee of collection is the bank first required to try to collect from the LLC. If the guaranty says you guarantee payment, then it is a guarantee of payment.

 

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This communication is not intended as legal advice. A local attorney should always be consulted for legal advice. No client/attorney relationship is intended or created by this communication.

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