Surviving Liability of Dissolved LLCs

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In 2007, Division 1 of the Washington Court of Appeals decided three cases that may have significant ramifications regarding the continuing liability of single-project LLCs. These cases are: (1) Chadwick Farms Owners Ass’n v. FHC, LLC, 139 Wn. App. 300, 160 P.3d 1061 (2007); (2) Maple Court Seattle Condo. Ass’n v. Roosevelt, LLC, 139 Wn. App. 257, 160 P.3d 1068 (2007); (3) Emily Lane Homeowners Ass’n v. Colonial Dev., L.L.C., 139 Wn. App. 315, 160 P.3d 1073 (2007). These cases hold that a dissolved and cancelled developer-LLC has no standing to sue its contractors, but that due to recent revisions in the Limited Liability Companies Act, the developer LLC could nevertheless remain liable to the HOA. 

This post is the first in and introduction to a four-part series that will address the significance and possible effects of these holdings in three situations: (1) the administratively dissolved LLC; (2) the member-dissolved LLC; and (3) surviving liability of LLC members.  The final section will address the insurance-related ramifications of the court's holding in Maple Court.  These sections will follow over the coming weeks, as my blog is updated weekly.


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