How best to collect money from an LLC?

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How best to collect money from an LLC?

I sold a business about 5 years ago and financed the buyers down payment;the buyers bank financed the other part. I have a lien on the property but it is in the second position. The promissory note is with the buyers LLC. With no personal guarantee He was supposed to make interest payments for 5 years with a balloon at the end. He has not made a payment in over 2years and he won’t respond to me. He says he can’t make the payment to the bank but he stills owns property. He also let the LLC be dissolved by the state for non-payment. How can I try to collect (collection agency or attorney)?

Asked on February 3, 2012 under Business Law, Georgia

Answers:

Glenn M. Lyon, Esq. / MacGregor Lyon, LLC.

Answered 8 years ago | Contributor

Assuming you mean that the LLC was administratively dissolved by the Secretary of State, you may still pursue your claim against the company for non-payment. And even if the dissolution was a true, voluntary dissolution, you would most likely have a claim against the owner for dissolving the company with outstanding debt, which is considered a fraudulent transfer.

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The foregoing is general information only, not specific legal advice. No attorney/client relation has been created or should be implied.

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

If  the LLC is dissolved, then your debt is effectively gone and you cannot collect. You say that the promissory note was with the LLC, with no personal guaranty. That means that only the LLC was obligated on the note. If the LLC still existed, you could try to collect by suing, getting a judgment against it, then levying on a bank account, executing on property (e.g. office equipment, vehicles, inventory), etc. But if the LLC has been dissolved, then there is no one remaining who owes you the money--you can't collect from a defunct LLC, and you can't collect from its owner without a personal guaranty.


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