Reverse Veil Piercing Given New Life in California Against a Delaware LLC In Curci

James P. Baldwin, a California real estate developer, formed a Delaware LLC called JPBI. Baldwin owned 99% of the company and his wife owned the other 1%. Baldwin, as manager and CEO, made all distribution decisions, i.e. he decided when and how much JPBI would pay out to him and his wife.

In 2006, Baldwin individually received a $5.5 million loan that was eventually purchased by Curci Investments. The loan terms required repayment by 2009 with interest. When January 2009 came and went with no repayment, Curci filed suit against Baldwin and won a $7.2 million judgment. Curci was granted a number of liens on Baldwin’s interests that gave it precedent over distributions. Despite $178 million in distributions between 2006 and 2012, this revenue suddenly dried up post-judgment.

A possible solution for Curci, California law allows a creditor to include an alter ego of the debtor along with the judgment; Curci recently took the required steps needed to add JPBI to the judgement against Baldwin.

See Jay D. Adkisson, Reverse Veil Piercing Given New Life in California Against a Delaware LLC In Curci, Forber, August 13, 2017.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.