The LLC—Asset Protection Interface

Linscott R. “Lin” Hanson

(Di Monte & Lizak, LLC, Park Ridge, Illinois) has recently published his article entitled Don’t Use an LLC for Asset Protection, 96 Ill. B.J. 314 (2008).

Mr. Hanson explains several theories which a creditor may use to “‘get inside’ the LLC and obtain the underlying assets.”  The methods he describes include:
   

·         Fraudulent conveyance

·         Bankruptcy “claw back” (treating LLC as s similar device to a self-settled trust)

·         Reverse veil-piercing