Judgment Awarding Value of Withdrawing Member’s Interest in an LLC Subordinated

In O’Donnell v. Tristar Esperanza Properties, LLC, BAP No. CC-12-1340-KIPaDu (9th Cir. BAP Mar. 8, 2013), the Ninth Circuit Bankruptcy Appellate Panel held that a judgment awarding the value of a withdrawing member’s interest in a limited liability company is vulnerable to mandatory subordination under Bankruptcy Code Section 510(b) as damages arising from the purchase or sale of a security. Read more here.