The Debate on Preventing LLC Bankruptcy Filings, by Alisa Peters
March 22, 2011
As a rule of law, the Bankruptcy Code prohibits the operation of ipso facto clauses, meaning that
provisions in loan agreements prohibiting or otherwise limiting the ability of the debtor to file
bankruptcy are generally rendered unenforceable by courts. However, what about provisions
contained within the operating agreements of the debtor itself? Can a debtor, of its own volition,
effectively prohibit itself from voluntarily filing bankruptcy? The Tenth Circuit, in a recent unpublished
decision, seems to think so. This article will analyze the Court’s holding in DB Capital Holdings, LLC
v. Aspen HH Ventures, LLC, 2010 WL 4925811 (10th Cir. 2010) (unpublished).
To read the complete article, please click the link below.
This article was previously published in the February 2011 issue of RPTE eReport by the ABA Real Property Trusts & Estates Section.
Learn more about the author, Nashville associate Alisa Peters.
by: Alisa C. Peters
topics: Creditors' Rights, Bankruptcy