Tuesday, December 2, 2008
This is a sad case about a woman, Allison Haack, who formed an LLC with her brother and was left on the hook when the LLC was dissolved because Ms. Haack did not abide by all necessary formalities in dissolving the association and could not account for all of its assets.
The case drives home the crucial point that states do business owners a great favor by letting them organize themselves as limited liability companies. All they ask in return is that the business owners make certain that the world is on notice that they are in fact LLCs. If the members of the LLC fail to do so, they are subject to something akin to veil-piercing, as was the unfortunate Ms. Haack.
Like most LLC cases, this one is not very colorful, nor is it great fun to teach, but it is set in Wisconsin's charming Kickapoo Valley, and I just like having reason to say "Kickapoo."
New Horizons v. Haack
She lost on appeal, poor Ms. Haack.
She could have won. But for the lack
Of a filing,
Ms. Haack would be smiling
And her finances back in the black.