Delaware Bankruptcy Court Holds LLC Operating Agreement Provisions Placing Sole Power in the Company’s Lender to Prevent a Bankruptcy Filing are Void as Against Public Policy
The Creditors Rights
SEPTEMBER 13, 2016
In an important decision for debtors and creditors alike, the United States Bankruptcy Court for the District of Delaware has ruled that provisions in a limited liability company operating agreement, granting the company’s lender absolute power to prevent the company from filing a bankruptcy petition are unenforceable as against public policy.
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