Full question:
I am being sued in a defamation case against my ex-boyfriend. I am a LLC with five homes that are cash free. Can the courts make me pay him for my personal properties? Or---can he only sue me for my personal home and cash in the bank? Which one of these two can he be awarded money against me?
- Category: LLC
- Date:
- State: Florida
Answer:
If an LLC is formed with the intent to avoid a claim, its assets may be considered a fraudulent conveyance. For example, transferring assets to an LLC just before filing for bankruptcy can raise concerns. According to the Uniform Fraudulent Transfer Act, a transfer is fraudulent if it was made: (1) with the intent to hinder, delay, or defraud a creditor, or (2) without receiving a fair value in return, and the debtor was either engaged in a business with insufficient assets or expected to incur debts they couldn't pay (Fla. Stat. § 726.105).
Additionally, in certain situations, a person can be sued individually under the alter ego theory. This means the court may disregard the LLC's separate identity and hold the individual personally liable if it finds that the LLC was merely a facade for the individual’s activities. Whether this applies will depend on the specific facts of the case.
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.