Multi-Member LLC Protection May Be Enhanced By Bills Introduced And Now Pending In Florida Legislture
Bills have been introduced in the Florida legislature to enhance the asset protection of multi-member LLCs. The Olmstead decision, which concerned directly only single member LLCs, suggested that creditors could use remedies other than charging liens to execute judgments against a debtor's interests in multi-member LLCs as well. The proposed legislation makes it very clear that charging liens are the only remedy applicable to a debtor's membership interest in multi-member LLCs. The bills also enhance creditor's rights to foreclose the debtor's interest in an LLC that has "only one member."
Identical bills have been introduced in the Florida Senate SB1152 and the Florida House HB 253. The bills are making their way through the committee and review process. I do not want to comment further on the legislation or its impact upon asset protection planning unless and until the bills become law.
