Quote:
Originally Posted by ScottFenstermaker
Contrary to some of the earlier posts, utilizing an LLC will not protect its owners from criminal and civil liability in case of fraud. For example, Bernie Madoff's company was an LLC, and he ended up with a 150-year prison sentence and a huge civil judgment.
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The talk of an LLC shielding the owners, is nonsense.
The legalese mantra is "piercing the corporate veil", as was pointed out.
There are some actions that are commonly used to pierce the corporate veil. Intermingling of funds, similar board members/corporate officers, "insider trading (doing business with related entities") and breach of fiduciary responsibility.
Most every time the Morse family, the Developer or the various entities are described, writers seem to have the need to describe everything as "closely held" ... because they are closely held.
I don't think there's any way to predict where this is going to shake out, but you can be sure, no one is going to be completely protected by a LLC entity.