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IN RE WRIGHT, 15-58467. (2016)

Court: United States Bankruptcy Court, E.D. Michigan Number: inbco20160108722 Visitors: 19
Filed: Jan. 08, 2016
Latest Update: Jan. 08, 2016
Summary: ORDER REGARDING APPARENT IMPROPER JOINDER OF DEBTORS THOMAS J. TUCKER , Bankruptcy Judge . On December 23, 2015, the Debtor filed a voluntary petition for relief under Chapter 1,3 commencing this case (Docket # 1). On January 6, 2016, the Debtor filed an amended petition (Docket # 15). On page 4 of the amended bankruptcy petition, in the spaces next to Item 4, which requires the Debtor to list "[a]ny business names and Employer Identification Numbers (EIN) you have used in the last 8 years,
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ORDER REGARDING APPARENT IMPROPER JOINDER OF DEBTORS

On December 23, 2015, the Debtor filed a voluntary petition for relief under Chapter 1,3 commencing this case (Docket # 1). On January 6, 2016, the Debtor filed an amended petition (Docket # 15). On page 4 of the amended bankruptcy petition, in the spaces next to Item 4, which requires the Debtor to list "[a]ny business names and Employer Identification Numbers (EIN) you have used in the last 8 years," Debtor listed "Sophisto Soul, LLC."

In completing Item 4, an individual debtor should not list a business entity, such as here, a limited liability company. The individual debtor is not considered to have "used" such a separate entity's business name, within the meaning of the question in Item 4. Rather, the information required by Item 4 is limited to trade names and doing-business-as names of the individual only, not of any other entity like a corporation or a limited liability company. A corporation and a limited liability company are separate entities from an individual debtor. An individual cannot do business as or be formerly known as a corporation or a limited liability company.

Similarly, the limited liability company name in question also should not be listed as a "sole proprietorship" in answering Item 12 on the amended petition, because, as stated in Item 12: "A sole proprietorship is a business you operate as an individual, and is not a separate legal entity such as a corporation, partnership, or LLC." (Emphasis added).

It appears that the Debtor may be attempting to join a limited liability company as a joint debtor in this bankruptcy case. A bankruptcy petition may not join two or more non-spousal entities. 11 U.S.C. § 302. The inclusion of the name of a limited liability company as another name for the individual Debtors is an improper joinder that may cause creditors to wrongly conclude that the entity is actually a debtor in this bankruptcy case. This problem must be promptly remedied.

Therefore, no later than 7 days after the entry of this Order, the individual Debtor in this case must file an amended bankruptcy petition that removes all reference to a limited liability company, so that it is clear that this entity has not filed bankruptcy in this case. If the individual Debtor wishes to list in her schedules creditors whose debts are primarily the obligation of this entity, but with respect to which the Debtor feels might be also personally liable, nothing prevents her from listing those debts and the creditors in her schedules.

If the Debtor does not timely comply with the above requirement, the Court may dismiss this case, without further notice or hearing.

IT IS SO ORDERED.

Source:  Leagle

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