5th Circuit Update: Liability and LLPs
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Yesterday the Fifth Circuit released Evanston Ins. Co. v. Dillard Department Stores Inc., which will be of interest to lawyers and civil practitioners. The court's per curiam opinion imposes individual liability on the two law partners of a defunct limited liability partnership for a judgment taken against the law firm by Dillards arising from the firm's cyberpiracy-web-site business model.
The judgment was taken against the law firm after the partners signed an agreement to dissolve the limited liability partnership and after its LLP registration had expired without renewal. As a result, the "debt" (the judgment) was was "incurred" when the law firm was not an LLP. When Dillards sued the partners to collect the judgment, the LLP statute provided no protection.
So, if you're dissolving that LLP, it ain't over 'til it's over. Keep that registration current until all the liabilities are in the rear view mirror.
Oh, and cyberpiracy to attract clients isn't good either. No need to thank me. I'm just here to help.
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