StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...
Free

The Rights of Creditors - Essay Example

Cite this document
Summary
The essay "The Rights of Creditors" focuses on the critical analysis of the major issues in the rights of creditors. The rights of creditors like Mr. Benhur refer to the procedural provisions that are put in place to protect the creditor’s ability to recover the monies…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER96.1% of users find it useful
The Rights of Creditors
Read Text Preview

Extract of sample "The Rights of Creditors"

These rights normally depend on the reason for which this debt came about as well as the terms that have been agreed upon between the two parties to the debt (Twomey & Jennings, 2010).

Their rights tend to also deal with the rights of creditors against other creditors. These legislations determine which of several creditors have the right to a particular debtor’s property in cases whereby more than one creditor lays a claim on a given debtor’s property. These creditors may be divided into those who perfected their interest by establishing a suitable public record of the said debt and any other property that is claimed as collateral for this debt and also by if the given debt came to be as a purchase money security interest (Twomey & Jennings, 2010). Creditors may request a court of law to set aside a fraudulent conveyance that is designed to put the property owned by the debtors out of the creditors’ reach.

In Nebraska, the property or money of a limited liability company cannot be seized by creditors to pay off the personal liabilities or debts of the owners of the limited liability company (Gless, 2008). If Adam opts to change his company to a limited liability company, Benhur as well as other creditors to the business will have to be aware of these rights and limitations in case the business acquires this legal status. However, there are other means through which creditors may use to go after the company while trying to recover the debts personally owed by the owner of the business (Gless, 2008).

This can be achieved through the following means:
- Obtaining a court order that directs the LLC to be liquidated by selling all of its assets.
- Foreclosing the business based on the debtor-owner’s limited liability company ownership interest.
- Getting a charging order that directs the company to pay the monies distributed to the debtor owner.

The state of Nebraska allows personal creditors of an LLC owner to get a charging order that is drawn against the membership interest of the owner. This is an order that is given by a court of law directing the business manager to authorize payment to the business owner’s person for any profits or income that would otherwise have been distributed to the debtor member. It should however be remembered that creditors that possess this charging order will only be able to get hold of the owner-debtor’s financial rights but will not have the power to actively manage the LLC.

Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Assignment Essay Example | Topics and Well Written Essays - 500 words - 64”, n.d.)
Assignment Essay Example | Topics and Well Written Essays - 500 words - 64. Retrieved from https://studentshare.org/law/1648594-assignment
(Assignment Essay Example | Topics and Well Written Essays - 500 Words - 64)
Assignment Essay Example | Topics and Well Written Essays - 500 Words - 64. https://studentshare.org/law/1648594-assignment.
“Assignment Essay Example | Topics and Well Written Essays - 500 Words - 64”, n.d. https://studentshare.org/law/1648594-assignment.
  • Cited: 0 times

CHECK THESE SAMPLES OF The Rights of Creditors

Caja Mediterrneo Bank Insolvency

In the paper 'Caja Mediterráneo Bank Insolvency' the author analyzes a savings bank located in Spain that had to be sold to Banco Sabadell for one Euro.... Caja Mediterráneo was a non-profit social institution, which had benefited more than five, 100, 000 people from its social commitments....
8 Pages (2000 words) Case Study

Uncommercial Transactions and Insolvent Transactions

he period of six months is being extended to 10 years ending on the relation-back date in cases where the insolvent transaction has the effect of defeating, delaying, or interfering with The Rights of Creditors of the company.... Thus an insolvent transaction of a company entered into during 10 years ending on the relation-back day would be considered voidable if the transaction was entered into with the specific intention of hindering the rights of the creditors of the company....
11 Pages (2750 words) Essay

Capital Requirements for Bluegill Corporation

Moreover, during liquidation process, the liability of a sole owner of an S or C corporation is determined by the amount of money the owner has invested in the business, hence personal assets are not subject to The Rights of Creditors to seize or place a lien.... As a result of the current economic downturn, Susan, sole owner of Bluegill Corporation, needs to invest an additional $80,000 for working capital requirements of the business....
3 Pages (750 words) Essay

The Conflicts of Interests Within the Objectives of Minimum Capital Maintenance

It has often been contended that the provisions of the various European Company Law legislation that deal with the share capital of the companies have been formed solely with the object of protecting the rights of one class of the external stakeholders namely the 'creditors'.... It is possible that the shareholders take advantage of the vulnerable position of the creditors.... According to Macey Jonathan (2001), the doctrine has created costs for the creditors, shareholders and the companies alike....
8 Pages (2000 words) Research Paper

Creditors Rights and Bankruptcy

The paper "creditors Rights and Bankruptcy" states that generally, the risks involved in business and the reasons why some entrepreneurs fail to prosper in their business, etc were mentioned in the introduction.... Bankruptcy, debtors, creditors, etc are some common terms associated with the business.... In such cases, the entrepreneur or the organization (debtor) may try to file bankruptcy suits in order to escape from the immediate threats from the creditors....
6 Pages (1500 words) Term Paper

TLATA 1996, Concurrent Co-ownership of Property

The paper "TLATA 1996, Concurrent Co-ownership of Property " highlights that generally speaking, the law of co-ownership operates whenever two or more people enjoy the rights of ownership of the property at the same time, either freehold or leasehold.... Generally, this question mainly pertains to the rights of the beneficial co-owners under the trust of land and any protection afforded to them under law, where the trustees or the third parties apply to the Hon'able Court to obtain an order to sell the property which is the subject matter of the trust....
9 Pages (2250 words) Essay

The Rationale and Impact of the Rule in Salomon versus Salomon

lthough there was no opposition from the Crown to the idea of legal personality, public pressure turned in opposing any extension of legal personality that later became troubled with the stance of creditors.... The paper "The Rationale and Impact of the Rule in Salomon versus Salomon" describes that piercing the veil in the various circumstances will lead to a twist in the words of the legislation as well as ignoring the unfavorable results upon the activities of the company....
9 Pages (2250 words) Essay

Australian Corporate Insolvency Laws

They facilitate creditors of private companies to take steps towards replacing management in the case of troubled firms thereby helping to create the required prudence in corporate behavior.... For instance, cases such as negligence on the part of directors towards creditors, personal commitments provided to the company or in situations when a civil liability arises towards insolvent trading are all cases where the insolvency laws can be brought to use....
7 Pages (1750 words) Assignment
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us