[RPPTL LandTen] Sold the property, but the defense suit remains

[Arthur J. Menor]

Jeff, as a general rule the manager or managing member of an LLC has a duty to provide for payment of all known claims at the time of dissolution of the LLC and distribution of its assets.  A creditor can go after the members of the LLC for amounts distributed to them at a time when there were known claims against the company.

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Arthur J. Menor
Partner
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________________________________
From: landten-bounces at lists.flabarrpptl.org [mailto:landten-bounces at lists.flabarrpptl.org] On Behalf Of Jeffrey Mazor
Sent: Monday, March 14, 2011 6:36 PM
To: 'RPPTL Landlord Tenant Committee'
Subject: [RPPTL LandTen] Sold the property, but the defense suit remains

A former warehouse tenant filed suit against the warehouse owner, my Florida LLC client, claiming that after a hurricane had damaged the roof and other structural elements, my client failed to adequately repair and maintain, resulting in all sorts of damage. It's a bogus claim, but will still cost my client money to defend.

The thing is, my client sold the property long ago, it was the only asset and almost all the net proceeds have been distributed. There's a little money left, and this lawsuit is the only reason that  the principals have not dissolved the LLC.


1.        Does it make more sense to (a) fight, (b) settle or (c) just dissolve the LLC and  let the Plaintiff take a potentially large default judgment?


2.        If we just dissolve and distribute the remaining assets to the stakeholders, and just allow a default and substantial judgment to be entered, how much exposure would there be for the distributes?

Jeffrey R. Mazor, Esq.
J. R. Mazor & Associates, P.A.
Presidential Circle Building
4000 Hollywood Blvd.,  Suite 265-s
Hollywood, FL 33021
Phone: 954-962-3500
Fax:       954-962-3560
Email:   Jmazor at Mazor.com<mailto:Jmazor at Mazor.com>

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