Standing To Sue On Behalf Of Corporation.

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Latest post 08-06-2006 1:18 PM by Taxagent. 4 replies.
  • 08-04-2006 9:47 PM

    Question [=?] Standing To Sue On Behalf Of Corporation.

    Person A owns an LLC that owns a parcel of real estate. Person A dies and a probate action is initiated in district court. Person B is the widow of Person A. In the inventory there is no mention of the LLC, real estate or any leases owned by the LLC. Does Person B have standing to sue on behalf of an LLC that they are a complete stranger to?
  • 08-05-2006 12:24 PM In reply to

    Feedback [*=*] re: Standing To Sue On Behalf Of Corporation.

    “Does Person B have standing to sue on behalf of an LLC that they are a complete stranger to?”

    Generally, no. The widow must instead seek to have the executor account for the LLC member interest owned by her late husband. She should consult a probate attorney for assistance with that. Until the member interest passes to her she has no ability to act on behalf of the LLC.
  • 08-05-2006 5:19 PM In reply to

    Question [=?] re: Standing To Sue On Behalf Of Corporation.

    Thank you Taxagent for your insight. In this situation the widow is the executrix of the estate. The probate action is now closed and there was never any mention of the real estate or the LLC in any of the inventories filed with the court. In your opinion is this grounds for dismissal under a motion for judgement on the pleadings?
  • 08-06-2006 1:18 PM In reply to

    Feedback [*=*] re: Standing To Sue On Behalf Of Corporation.

    “Thank you Taxagent for your insight. In this situation the widow is the executrix of the estate.”

    That is a key fact you left out from your earlier post. Assuming the LLC interests were estate property, then the executrix would be empowered to operate the LLC until the interests passed to the estate beneficiaries. Thus, if the LLC were to sue or be sued, she could retain an attorney for the LLC to represent it in court. As executrix, it is her job to round up the estate assets (including the LLC interests) and to administer them for the benefit of estate creditors and beneficiaries. If she fails to do that, she may breach her fiduciary duty to the estate.

    “The probate action is now closed and there was never any mention of the real estate or the LLC in any of the inventories filed with the court. In your opinion is this grounds for dismissal under a motion for judgement on the pleadings?”

    It is impossible to say since you don't indicate who the parties to the lawsuit are, what the lawsuit is about, or anything else about the lawsuit.
  • 08-06-2006 4:01 PM In reply to

    Feedback [*=*] You don't OWN a corp . . .

    You own shares. Even if you own all the shares, you still just own shares. You might not have control.

    The LLC wouldn't be owned by the estate. The shares would. The LLC's property would NOT be in the estate of the decedent if the LLC continued to exist.

    The executrix would have authority to assert the rights that the shares of the LLC possess.
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