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 Spock, circa Star Trek II, the needs of the many outweigh the needs of the few.
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Tagged liability of corporate principals