Forbes has published an article, “Debtor’s Large LLC Distribution To Circumvent Charging Order Draws Ire Of Non-Debtor Member In Bargreen” which discusses Wholesaler Equity Development Corp (Wedco). v. Bargreen as it pertains to effects of charging orders on the relationship between businesses, debtor members, and non-debtor members. The summary of the article is as follows:
It is said in court opinion after court opinion that the very purpose of the charging order is to prevent disruption of the business by forcing the non-debtor members into what would amount to an involuntary partnership with the debtor member’s creditor. But this case demonstrates that a charging order can have a substantial impact on the business itself by indirectly interfering with the business relationship of the debtor member and a non-debtor member. Bargreen wanted the distribution immediately and made it without consulting with Wedco, and Wedco didn’t want the distribution to be made at all and became miffed at how Bargreen had made it, and all that ultimately lead to the final death of their business relationship.
Click here to see full article: “Debtor’s Large LLC Distribution To Circumvent Charging Order Draws Ire Of Non-Debtor Member In Bargreen”
To download the full opinion, click here: Wholesaler Equity Development Corp. v. Bargreen, 2021 WL 321560 (W.D.Wa., Feb. 1, 2021).
Posted by Elise Kim, Managing Associate Editor, Wealth Strategies Journal.