Business Disputes

Evaluating the Latest Developments in the World of Single-Member LLCs

Special regard may need to be given in Florida to single-member LLCs.  In Federal Trade Commission v. Olmstead, 528 F.3d 1310 (11th Cir. 2008), the United States Court of Appeals for the Eleventh Circuit certified a question to the Florida Supreme Court as to whether a court might order a judgment debtor to surrender all right, title, and interest in the debtor’s single-member LLC company to satisfy an outstanding judgment, notwithstanding the language appearing in F.S. § 608.433(4).  The FTC argues that even though the plain text of the LLC Act does not distinguish between a single-member and multiple-member LLCs, the “overall statutory context” suggests that a charging order limitation is “senseless” and cannot be the exclusive remedy, given that the remedy itself originated out of common law concerns to protect nondebtor partners from being forced unwillingly into partnership with a creditor. The court there noted how “both parties rely on well-established canons of statutory construction.” Olmstead claims that where a statute is clear and unambiguous, courts are not to look beyond the statute’s plan language for legislative intent, while the FTC counters that there is a “cardinal rule of statutory construction” which states that a “legislature does not intend to create statutes that lead to an unreasonable or ridiculous result.” 

If you are an owner of a closely-held business entity and want to know more about piercing of the veil and charging order liens, please contact us.
 
If you have concerns or questions about any of these alternative legal theories and wish to consult with the Tufts Law Firm, please contact us.