Barry M. Klayman, left, and Mark E. Felger, right. Courtesy photos Bankruptcy Code Preempts LLC Act's Statute of Repose for Recovery of Distributions
In Miller v. Black Diamond Capital Management (In re Bayou Steel BD Holdings), Adv. Pro. No. 21-51013 (KBO), 2022 WL 3079861 (Bankr. D. Del. Aug. 3, 2022), U.S. Bankruptcy Judge Karen B. Owens held that Delaware's three-year statute of repose on the liability of a member for distributions from a limited liability company, measured from the date of distribution, was preempted by Section 546 of the Bankruptcy Code.
August 31, 2022 at 09:00 AM
7 minute read
In Miller v. Black Diamond Capital Management (In re Bayou Steel BD Holdings), Adv. Pro. No. 21-51013 (KBO), 2022 WL 3079861 (Bankr. D. Del. Aug. 3, 2022), U.S. Bankruptcy Judge Karen B. Owens held that Delaware's three-year statute of repose on the liability of a member for distributions from a limited liability company, measured from the date of distribution, was preempted by Section 546 of the Bankruptcy Code, which provides that a trustee must bring an avoidance action under Section 544 within two years from the entry of a debtor's order for relief. The effect of the decision is to give the Chapter 7 trustee more time to commence an avoidance action to recover distributions made by a debtor LLC to its members.
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