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

Note: CPE credit is not offered on this program

Recording of a 90-minute CLE webinar with Q&A


Conducted on Wednesday, April 1, 2020

Recorded event now available

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Program Materials

This CLE webinar will provide practitioners with an analysis of some of the unique issues that arise in the bankruptcies of partnerships and LLC entities and their partners or members. The panel will address topics in recent partnership bankruptcy cases, as well as how courts cope with the lack of specific Bankruptcy Code provisions addressing such entities.

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.

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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 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
    7. Impact of tax reform
  2. A bankruptcy filing by 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

Benefits

The panel will review these and other key 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 filing for bankruptcy personally or in deciding whether to put a partnership or a partnership-like entity into bankruptcy?

Faculty

Riela, Michael
Michael J. Riela

Partner
Tannenbaum Helpern Syracuse & Hirschtritt

With more than 15 years of experience, Mr. Riela advises companies on complex restructuring, distressed M&A, loan...  |  Read More

Trotter, Richard
Richard W. Trotter

Attorney
Tannenbaum Helpern Syracuse & Hirschtritt

Mr. Trotter's diverse practice includes litigating a wide variety of complex commercial litigation and bankruptcy...  |  Read More

Other Formats
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Strafford will process CLE credit for one person on each recording. All formats include program handouts. To find out which recorded format will provide the best CLE option, select your state:

CLE On-Demand Video

48 hours after event

$297

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48 hours after event

$297