LLC Agreement Prohibiting Bankruptcy Filing Held Enforceable

December 14, 2010
A recent Tenth Circuit Bankruptcy Appellate Panel decision has called into question the generally accepted premise that pre-petition agreements to forgo the protections of bankruptcy are invalid as against public policy. The Tenth Circuit ruled that provisions contained in a limited liability company agreement that expressly barred the company, and restricted the manager, from filing a bankruptcy petition were enforceable. This update examines and clarifies the court’s decision.