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

A live 90-minute CLE video webinar with interactive Q&A

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Tuesday, October 4, 2022 (in 3 days)

1:00pm-2:30pm EDT, 10:00am-11:30am PDT

or call 1-800-926-7926

This CLE course will guide practitioners through unique issues when partnerships, limited liability companies, or their partners and members file bankruptcy. The panel will address topics in recent partnership bankruptcy cases and how courts cope with the lack of specific Bankruptcy Code provisions addressing such entities. The panel will also preview the issues in Bartenwerfer v. Buckley, U.S. Case No. 21-908, in which the U.S. Supreme Court will consider whether a debt can be non-dischargeable based on when it was incurred through the actions of a business partner without the debtor's knowledge.

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 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 bankruptcy filings of the partnership or LLC entity and bankruptcy filings by a partner or LLC member. The panel will also discuss recent high-profile law firm bankruptcies.

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Outline

  1. A bankruptcy filing by the partnership or LLC entity
    1. The statutory and contractual authority of partners to file a voluntary or involuntary petition on behalf of or against the entity
    2. Definition of "insolvent"
    3. Effect of the entity's automatic stay upon creditor claims against general partners personally
    4. Rights of an entity or its creditors against partners for fraudulent conveyances and violations of fiduciary duties
    5. Issues arising from recent high-profile law firm bankruptcies
    6. IRS ruling regarding COD income for partners resulting from cancellation of the partnership's debt in bankruptcy
  2. A bankruptcy filing by a partner or LLC member
    1. Continuity of the partnership
    2. Enforceability of certain ipso facto clauses
    3. Nature of the partnership agreement as an executory contract
    4. Transferability of the debtor's economic interest in the partnership or LLC
  3. Preview of Bartenwerfer v. Buckley, U.S. Case No. 21-908

Benefits

The panel will review these and other crucial questions:

  • Who has the authority to put a general or limited partnership, a limited liability partnership, or an LLC into bankruptcy?
  • Will the bankruptcy of a partner cause a dissolution of the partnership or partnership-like entity, preventing it from filing bankruptcy?
  • What conflicts of interest does a general partner have in personally filing for bankruptcy or deciding whether to put a partnership or a partnership-like entity into bankruptcy?

Faculty

Miller, Evan
Evan T. Miller

Director
Bayard

Mr. Miller concentrates his practice in the areas of corporate bankruptcy and restructuring, representing debtors (both...  |  Read More

Smelko, William
William Smelko

Partner
Procopio Cory Hargreaves & Savitch

Mr. Smelko brings more than thirty-five years of experience to his representation of clients in litigation, with an...  |  Read More

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