Harris v. Gander Partners (ND IL)

Harris N.A. v. Gander Partners LLC ,(N.D.Ill.)

Issue: When an LLC is in Chapter 11 reorganization, can a creditor collect directly from the principals of the company instead?

Answer: Apparently not in the Northern District of Illinois

Upshot: Here, the Court upheld an injunction entered by the Bankruptcy Court after determining that

  • The participation of these principles was essential to the company’s reorganization
  • If these principles were distracted by this lawsuit the reorganization would likely fail
  • Many other creditors would be harmed financially if this reorganization failed; and
  • The creditor seeking to collect only faced only a temporary stay, anyway.

In the immortal words of Spockcirca Star Trek IIthe needs of the many outweigh the needs of the few.

 

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