Partnership and LLC Bankruptcies: Unique Legal Issues and Recent Case Law Developments

Description

The lack of specific Bankruptcy Code provisions often requires courts to decide whether to treat such entities in the same manner as corporations or as general partnerships based upon the particular organizational structure of the entity. Recent high profile law firm bankruptcies have illustrated the conflict between general partnership law and bankruptcy law.

Critical issues with partnership entity bankruptcies include the statutory and contractual authority of the partners or members to file a voluntary petition on behalf of the entity or to file an involuntary petition against the entity; the definition of "insolvent"; the effect of the entity's automatic stay upon creditor claims against the general partners personally; and the rights of the entity or its creditors against partners or members for, among other things, fraudulent conveyances and violations of fiduciary duties.

When a general partner files for bankruptcy relief, critical issues include the continuity of the partnership, the enforceability of certain ipso facto clauses, the nature of the partnership agreement as an executory contract, and the transferability of the debtor's economic interest in the partnership or LLC.

Listen as our authoritative panel of attorneys guides you through the unique features of partnership and LLC entity bankruptcies concerning bankruptcy filings and proceedings. The panel will discuss both bankruptcy filings of the partnership or LLC entity as well as bankruptcy filings by a partner or LLC member. The panel will also discuss issues arising from recent high profile law firm bankruptcies.