Broomfield, CO asked in Business Law for Colorado

Q: Any law in Colorado to stop an LLC from dissolving to avoid paying a judgement then turn around and start a new like LLC

We are suing a Contractor (LLC) and are pretty sure we'll win, but hate to think they can simple dissolve the LLC, and then turn right around and start another Contracting Company (LLC) and get away with it.

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1 Lawyer Answer
D. Mathew Blackburn
D. Mathew Blackburn
  • Licensed in Colorado

A: In that scenarios there's a few different approaches to pursue the owners and the new entity. First LLC owners can be responsible for judgements against the LLC for amounts distributed form the LLC for a period of three years prior to dissolution. Second, this would likely be considered a fraudulent transfer. Both create liability for the owner/s individually, which is counter to the purpose of having an LLC in the first place. It's always a bad idea, but people do it.

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