I posted the other day on the controversial new Florida Olmstead decision that adversely affects the viability of single member LLCs. We got mail from a couple of readers following up on that post:
I just read your recent blog post regarding the Olmstead case. There is currently a Florida Bar committee working on a legislative fix. However, you might find it interesting that the "exclusive remedy" language in the proposed legislation only applies to multi-member LLCs. The primary justification for the fix is to mirror Florida's limited partnership law, where it is well established that a charging order is the exclusive remedy. Under the limited partnership law, the policy objective is to protect the non-debtor partners. However, because there is no such thing as a single-member partnership, the partnership law does not provide a reason to protect single-member LLCs. My guess is they want to fix the multi-member issue now (which should easily be passed by the legislature) and perhaps fight the single-member battle another day.
And yet another:
The Eleventh Circuit has now decided the case as to which it sought advice from the Florida Supreme Court in Olmstead. Quoting from pages 6 and 7 of the decision:
"Here, Defendants have membership interests in single-member LLCs. Where an LLC has only one member, no need exists to protect the interests of other members by restricting judgment-creditors to a charging-order remedy. So, a judgment-creditor is not barred from pursuing the remedy available under section 56.601, which allows a court to levy upon a defendant's interest in stock in a corporation, including a membership interest in an LLC. The district court, thus, properly granted the FTC's motion to compel the surrender of assets."
