Barry Klayman and Mark Felger, writing in the Delaware Business Court Insider, discuss a recent decision by a judge in the Bankruptcy Court for the District of Delaware holding that Section 546 of the Bankruptcy Code preempts Delaware’s three-year statute of repose on the liability of a member for distributions from a limited liability company. The effect of the decision was to give the Chapter 7 trustee more time to commence an avoidance action to recover distributions made by a debtor LLC to its members.
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