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Purchasing control of a closely held LLC in Chapter 11
My guess is that if the 90% interest holder doesn't confirm a plan under 1129(a) within the exclusively period when it controls voting under 1126(d), then the 10% equity holder might be able to confirm a competing new value plan by out bidding.
For the 90% interest holder's plan to succeed it would need to satisfy the absolute priority rule which could be accomplished by fully providing for the class containing the debt bought by the 10% equity holder under 1126(f) rather than trying to get acceptance by votes under 1126(c).
Sent from my iPhone - please excuse typos.
> On Sep 3, 2016, at 2:45 PM, Holly Roark hollyroark22@gmail.com [cdcbaa] wrote:
>
> If an LLC files a Chapter 11, can the 10% member gain 100% (or a majority) control over the company by either (1) purchasing all the debts and voting, and/or (2) contributing new value to the debtor such that they would own 100% (or a majority) (assuming the 90% member cannot contribute any or as much new value)?
>
> Can you point me in the direction of a good case or article about what can happen in this scenario? Presume 90% owner wants to maintain control and has all the important business relationships to further the business, but 10% owner has more cash or potential investors. This is a reorganization and the 90% member does not want to liquidate. 10% member wants various things: a greater interest in the company, loan repayment of an allegedly secured loan that may actually be an equity buy, or to liquidate.
>
> I've read LaSalle, but I need to read something short and to the point, i.e. "here is what can happen when you file a Chapter 11 and the minority member with cash (and maybe a secured loan/maybe not) hates you and wants to take everything."
>
>
> Holly Roark
> Certified Bankruptcy Specialist*
> and Sports Lawyer
> holly@roarklawoffices.com **primary email address**
> www.roarklawoffices.com
> Central District of California & District of Idaho - Consumer Bankruptcy Attorney
> 1875 Century Park East, Suite 600 Los Angeles, CA 90067
> T (310) 553-2600; F (310) 553-2601
> *By State Bar of California Board of Legal Specialization
>
>
The post was migrated from Yahoo.
If an LLC files a Chapter 11, can the 10% member gain 100% (or a majority)
control over the company by either (1) purchasing all the debts and voting,
and/or (2) contributing new value to the debtor such that they would own
100% (or a majority) (assuming the 90% member cannot contribute any or as
much new value)?
Can you point me in the direction of a good case or article about what can
happen in this scenario? Presume 90% owner wants to maintain control and
has all the important business relationships to further the business, but
10% owner has more cash or potential investors. This is a reorganization
and the 90% member does not want to liquidate. 10% member wants various
things: a greater interest in the company, loan repayment of an allegedly
secured loan that may actually be an equity buy, or to liquidate.
I've read LaSalle, but I need to read something short and to the point,
i.e. "here is what can happen when you file a Chapter 11 and the minority
member with cash (and maybe a secured loan/maybe not) hates you and wants
to take everything."
Holly Roark
Certified Bankruptcy Specialist*
*and Sports Lawyer*
holly@roarklawoffices.com **primary email address**
www.roarklawoffices.com
*Central District of California & District of Idaho* - Consumer Bankruptcy
Attorney
1875 Century Park East, Suite 600 Los Angeles, CA 90067
T (310) 553-2600; F (310) 553-2601
*By State Bar of California Board of Legal Specialization
If an LLC files a Chapter 11, can the 10% member gain 100% (or a majority) control over the company by either (1) purchasing all the debts and voting, and/or (2) contributing new value to the debtor such that they would own 100% (or a majority) (assuming the 90% member cannot contribute any or as much new value)? Can you point me in the direction of a good case or article about what can happen in this scenario? Presume 90% owner wants to maintain control and has all the important business relationships to further the business, but 10% owner has more cash or potential investors. This is a reorganization and the 90% member does not want to liquidate. 10% member wants various things: a greater interest in the company, loan repayment of an allegedly secured loan that may actually be an equity buy, or to liquidate.I've read LaSalle, but I need to read something short and to the point, i.e. "here is what can happen when you file a Chapter 11 and the minority member with cash (and maybe a secured loan/maybe not) hates you and wants to take everything."
The post was migrated from Yahoo.