Olmstead ruling -- single member LLC

to BLL, mcwagner, anyone else who knows:

Does the Olmstead ruling affect just the charging order, or the corporate veil/inside liability too? thanks
(In my area the homeowner’s insurnance carriers will not write a policy for an LLC with more than one member, so I am stuck with the single member LLC(s) if I choose to LLC.)

Sorry, I see that Olmstead has been discussed here already. It pays to use the search feature before posting.

What I have read is happening is that courts are finding that “charging order protection” does not apply to single member LLC’s.

In other words, the charging order protection was intended to protect other members’ interests in the event that any one member was subject to a lawsuit, bankruptcy or other event that would threaten their membership interest. In a single-member entity, there are no non-debtor members to protect. The charging order limitation serves no purpose in a single member limited liability company, because there are no other parties’ interests affected.

Courts have found (and not just in Olmstead – google: Modanlo, Albright, Cognex) that assets of a single member LLC are available to satisfy personal creditors of the single member.

Short answer: single member LLC’s are not a strong asset protection strategy. I presume that neither would be a multi-member LLC where the members are husband/wife. I would also expect this to extend to single shareholder S-corps as well.