We’ve been investors (single-family/commercial land) for 11 years. Our LLC is a husband/wife membership only started 2000 in NC. We got involved with a vacant land commercial project with 5 other entities coming together and obtained a $900,000 commercial (land only) loan in 2004 and the group created a new LLC specifically for the project. At closing, our own LLC (who was also a member of the new LLC created for this project) signed as a guarantor to a bank (but not my wife and I personally). Others signed personally along with spouses and respective entities at their discretion. In 2006-07 our LLC signed over all of its interest to the primary majority shareholder of the LLC holding this project and we cut our losses and parted ways (done through an attorney who was the bank’s trustee—and also happened to be our attorney as well at the time). Some of (if not all) the other members have filed bankruptcy personally and for their businesses.
There are some assets in our current LLC now of which we need to be pro-active to protect. We are looking for opinions from others (of course, we will get an attorney—but just looking for all the input, options, and views of others as well—including other attorneys who may read this). Within the last 30 days, we have come to understand a foreclosure hearing has been filed by the bank (we do not know if the bank is aware of all the bankruptcy filing of the other member yet). However, our LLC is no longer a member of the LLC created for this project but the foreclosure hearing does name our LLC (not us personally though). We are not clear if the bank is naming our LLC out of procedure to be sure they are notifying everyone possible in the file history for legal reasons or if they are intending to try to make a run on our LLC too yet (or both). We are thinking of anticipating a foreclosure and potential lawsuit that may try to attach to our current LLC (even though it is not a member now and everything was signed over in 2006-07). We believe that because of the above bankruptcies the process may stall for a good period of time, loan may be renegotiated with the bank through the bankruptcy judge, etc.
We have a good credit history personally and for our business since 2000 and have worked very hard getting our current LLC where it is today. However, we are thinking of taking pro-active steps to protect ourselves and our assets “just in case” by selling & transferring any/all assets now that we may have and create a brand new company to hold our assets and to do future business (or by using Grantor Trusts/Land Trusts). Also, of course, we are thinking of closing all of our LLC bank accounts, the LLC itself, and misc. accounts now too. We also thought of filing some-type of business bankruptcy or simply move/sell all assets into new company/Trusts. and then do nothing but wait afterwards. We hate to do any of this because of us working so hard to get the current LLC where it is today (minus this issue), but are willing sacrifice it if it makes sense to do and protect against potential lawsuits that may arise in the future against our LLC (not knowing, at this point, exactly how we may be targeted because our LLC was once a member of the LLC for the project—but not anymore). We have received the foreclosure hearing notice that shows our LLC as a guarantor. We have not been involved in the project at all for over 2 years and are unaware if any refinancing or extensions that may have taken place. Your opinions and insights are greatly appreciated (and maybe this will also help others with similar questions later too)!
Thanks is advance . . .