WA Supreme Court Decides When Dissolved/Cancelled LLC's May Be Sued

Limited liability companies have only been authorized in Washington since 1994 and there isn’t much case law discussing them or the statutory scheme which authorizes them.  So, any decision discussing LLC law is big news.

Knowing this -- and doing business as a PLLC -- last May, I promptly downloaded a Washington State Supreme Court  decision that discusses whether an LLC may sue and/or be sued after its certificate has been canceled or it has been dissolved.   Chadwick Farms Owners Association v. FHC LLC,  The decision, which involves two distinct fact patterns, is a bonanza for anyone interested in LLC law or who advises clients about it.  The opinion also reviews when the members of an LLC may be personally liable.

However, although the decision is must reading for anyone looking to sue a dissolved LLC, or for the former members of an LLC who want to bring an action (or are concerned about being sued), the discussion and the rulings that the court makes are fairly technical.  Anyone else might find it, well, dry reading, which is why I looked at it on my desktop for almost 90 days before getting past page 2. 

There is a vigorous dissent (it is a 5-4 decision), so it is probably prudent for someone reading the decision to check if the legislature has addressed the concerns in the dissent.

 
 

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