February 2017

The A/B Trust used to be one of the most popular estate planning products in a lawyer’s arsenal. Here’s how it previously worked: The first spouse dies and that spouse’s assets are placed into a trust using the first spouse’s estate tax exemption. The second spouse dies and their assets go to the children using the second spouse’s estate tax exemption. The assets in the first spouse’s trust then are passed to the children, thereby using both spouses estate tax exemption.   After years of this, the estate tax code was re-written combining the spouse’s exemptions making the A/B trust obsolete for this purpose. Some lawyers continue to use this method of estate planning even though it does some things poorly and others not at all. Although an A/B trust will pass the assets to the beneficiaries as good as other products, it has problems in the areas of privacy, asset protection, and Medicaid planning.   First, an A/B method of estate planning offers absolutely NO asset protection benefits while both spouses are alive and minimal protection after one spouse passes. In fact, if an attorney for a lawsuit checks a person who created an A/B trust for assets, they will see that they still own the assets in their name. While both spouses are alive, depending on how the lawyer drew up the estate plan, either each spouse has their assets in their own name with a will including a testamentary trust (a trust that doesn’t exist until death) or they each have their own revocable trust with half the marital assets.The A/B Trust used to be one of the most popular estate planning products in a lawyer’s arsenal. Here’s how it previously worked: The first spouse dies and that spouse’s assets are placed into a trust using the first spouse’s estate tax exemption. The second spouse dies and their assets go to the children using the second spouse’s estate tax exemption. The assets in the first spouse’s trust then are passed to the children, thereby using both spouses estate tax exemption.   Having assets in one’s own name or assets in a revocable trust doesn’t help for asset protection. In both scenarios, one has access to the assets, which means that one’s creditors can attach these assets as well as courts in the event of a lawsuit. After one spouse passes, the will creates an irrevocable trust or, alternatively, the revocable trust becomes irrevocable. The deceased spouse’s assets are now in an irrevocable trust and protected from creditors and the courts, but chances are that the prime years to get sued or go in debt happened a long time ago. Why not have an irrevocable trust in the first place?The A/B Trust used to be one of the most popular estate planning products in a lawyer’s arsenal. Here’s how it previously worked: The first spouse dies and that spouse’s assets are placed into a trust using the first spouse’s estate tax exemption. The second spouse dies and their assets go to the children using the second spouse’s estate tax exemption. The assets in the first spouse’s trust then are passed to the children, thereby using both spouses estate tax exemption.   An A/B trust also offers little protection from a Medicaid spend-down. Again, like above, while the spouses are alive, they will be subject to a Medicaid spend-down in order to qualify for long-term care benefits. The community spouse can keep a predetermined amount, but the rest will be spent down to a minimal amount ($1,500-2,000, depending on the state). Also, again, once one spouse dies, those assets are protected from the spend-down, but the other half of the assets are subject to the other spouses long-term care bills. An irrevocable trust would protect 100% of all of the assets.The A/B Trust used to be one of the most popular estate planning products in a lawyer’s arsenal. Here’s how it previously worked: The first spouse dies and that spouse’s assets are placed into a trust using the first spouse’s estate tax exemption. The second spouse dies and their assets go to the children using the second spouse’s estate tax exemption. The assets in the first spouse’s trust then are passed to the children, thereby using both spouses estate tax exemption.   An A/B trust doesn’t really do anything well. Instead of protecting half of the assets, a good irrevocable trust can protect all of the assets. The irrevocable trust takes all of the assets out of both spouse’s names so that they don’t own them anymore. If they don’t have title, the assets aren’t counted by Medicaid, aren’t included in the calculation for the estate tax, and cannot be found in a public record as being owned by you, thus they can’t be taken by creditors in the event of a lawsuit. In fact, if an attorney for a prospective lawsuit checks a person who created an irrevocable trust to hold assets, they won’t see any assets in your name and the lawyer probably won’t be interested in taking the case against you on a contingency basis. The lawsuit is stopped before it starts. There is a downside of an irrevocable trust; the persons creating it don’t have ownership of the assets past what they put in the trust documents. So, for the scared, there is the A/B trust and for the protected, the Ultra Trust irrevocable trust.The A/B Trust used to be one of the most popular estate planning products in a lawyer’s arsenal. Here’s how it previously worked: The first spouse dies and that spouse’s assets are placed into a trust using the first spouse’s estate tax exemption. The second spouse dies and their assets go to the children using the second spouse’s estate tax exemption. The assets in the first spouse’s trust then are passed to the children, thereby using both spouses estate tax exemption.

The Federal Trade Commission (FTC) has sued AmeriDebt, Inc., DebtWorks, Inc., and Andris Pukke for misrepresentations and deceptive omissions under the Federal Trade Commission Act (FTC Act), 15 U.S.C. § 41-58. It has also sued AmeriDebt for violations of the disclosure requirements under the Gramm-Leach-Bliley Act, 15 U.S.C. § 6801(a) et seq. The FTC alleges that Defendants, operating in common as a non-profit credit counseling service, defrauded consumers with debt problems by offering to fashion debt repayment plans for them, then deducting for their own benefit payments the consumers made under the plans without disclosing those deductions to the consumers. The FTC has also sued Pamela Pukke as Relief Defendant to recover such proceeds of these transactions as have been received by her husband, Andris Pukke, and transferred to her.   The FTC has filed a motion pursuant to Section 13(b) of the FTC Act, 15 U.S.C. § 53(b), requesting that the Court enter a preliminary injunction appointing a receiver, freezing the assets of Andris Pukke and DebtWorks, Inc. (collectively “Defendants”), *561 561requiring an accounting from them, and directing that Andris Pukke repatriate assets he has transferred offshore. 1The Court held oral argument on the motion and took it under advisement. On April 20, 2005 the Court entered an Order granting the Motion. This Opinion sets forth the reasons for the Court’s decision.   II.   The background of this litigation is set forth in FTC. v. AmeriDebt, 343 F.Supp.2d 451 (D.Md.2004). In brief, the FTC alleges that Defendants (except for Pamela Pukke) operated as a common enterprise to deceive consumers into paying for high-cost debt management plans in violation of Section 5 of the FTC Act, 15 U.S.C. § 45(a). After extensive discovery, the FTC filed a Motion for Summary Judgment Against DebtWorks and Andris Pukke, requesting that they be found liable, and that they be permanently enjoined and ordered to make restitution of some $172 million to injured consumers. That motion is currently pending. Meanwhile, the FTC alleges that since 2002, when Defendants became aware of the investigation that led to this lawsuit, Andris Pukke in particular has been actively dissipating Defendants’ assets by making transfers to close friends and relatives, to trusts (both domestic and offshore), and by living a lavish lifestyle. 2 For example, since 2003 Pukke and DebtWorks have transferred over $2.8 million to individuals who never worked for DebtWorks, including Pukke’s father in Latvia, his girlfriend Angela Chittenden, and his wife Pamela, as well as at least $1.6 million to a company controlled by Pukke, Infinity Resources Group. In addition, less than two months after the FTC served AmeriDebt and DebtWorks with Civil Investigative Demands in May and August 2002, Pukke attempted to establish domestic and offshore trusts which the FTC asserts were part of an effort to put his assets out of reach of the FTC and other creditors. 3 Pukke, however, appears to retain substantial control over three primary trusts: The Pukke 2002 Family Irrevocable Trust (located in Delaware with estimated assets *562 562of over $8.8 million), The P Family Trust (established under the laws of the Caribbean island of Nevis with estimated assets of $9 million), and The P II Family Trust (established under the laws of the Cook Islands with estimated assets of $1.3 million). Lastly, the FTC catalogs numerous expenditures Pukke has made out of DebtWorks’ funds to maintain personal residences, yachts and vacations unrelated to DebtWorks’ business. The FTC asserts that if this behavior is allowed to continue, there is a substantial risk that it will not be able to satisfy any final order granting equitable monetary relief that may be entered in this case.   III.   Defendants oppose the Motion for Preliminary Injunction on the grounds that: (a) the Court lacks jurisdiction to grant the requested relief; (b) the FTC has failed to meet its burden of demonstrating a likelihood of success on the merits; (c) the FTC has failed to show that the balance of equities favors the entry of a preliminary injunction; and (d) any order granting the requested relief would violate the Anti-Injunction Act, 28 U.S.C. § 2283, and improperly interfere with the priority of federal tax liens. 4   A. Jurisdiction   Pursuant to Section 13(b) of the FTC Act, “in proper cases the Commission may seek, and after proper proof, the court may issue a permanent injunction.” 15 U.S.C. § 53(b). The authority to grant such relief includes the power to grant any ancillary relief necessary to accomplish complete justice, including ordering equitable relief for consumer redress through the repayment of money, restitution, rescission, or disgorgement of unjust enrichment. FTC v. Febre, 128 F.3d 530, 534 (7th Cir.1997). To insure that any final relief is complete and meaningful, the court may also order any necessary temporary or preliminary relief, such as an asset freeze. FTC v. Gem Merch. Corp., 87 F.3d 466, 469 (11th Cir.1996). Exercise of this broad equitable authority, which is vested in the court’s sound discretion, is particularly appropriate where the public interest is at stake. Porter v. Warner Holding Co., 328 U.S. 395, 398, 66 S.Ct. 1086, 90 L.Ed. 1332 (1946) (citing Hecht Co. v. Bowles, 321 U.S. 321, 329, 64 S.Ct. 587, 88 L.Ed. 754(1944)).   Defendants contend that the Court’s jurisdiction to order the relief requested by the FTC is limited to “proper cases,” which they contend are only those in which the FTC seeks “to halt a straightforward violation of section 5 that require[s] no application of the FTC’s expertise to a novel regulatory issue,” citing FTC v. World Travel Vacation Brokers, Inc., 861 F.2d 1020, 1028 (7th Cir.1988). Defendants argue that since the FTC admitted in a press conference in November 2003 that this case involves “novel and difficult legal issues” rather than those involved in a routine fraud case, jurisdiction does not lie.   The FTC responds that a “proper case” under Section 13(b) is simply one that involves a violation “of any provision of law enforced by the Commission.”Gem Merch.,

The Federal Trade Commission (FTC) has sued AmeriDebt, Inc., DebtWorks, Inc., and Andris Pukke for misrepresentations and deceptive omissions under the Federal Trade Commission Act (FTC Act), 15 U.S.C. §§ 41-58. It has also sued AmeriDebt for violations of the disclosure requirements under the Gramm-Leach-Bliley Act, 15 U.S.C. § 6801(a) et seq. The FTC alleges that Defendants, operating in common as a non-profit credit counseling service, defrauded consumers with debt problems by offering to fashion debt repayment plans for them, then deducting for their own benefit payments the consumers made under the plans without disclosing those deductions to the consumers. The FTC has also sued Pamela Pukke as Relief Defendant to recover such proceeds of these transactions as have been received by her husband, Andris Pukke, and transferred to her.   The FTC has filed a motion pursuant to Section 13(b) of the FTC Act, 15 U.S.C. § 53(b), requesting that the Court enter a preliminary injunction appointing a receiver, freezing the assets of Andris Pukke and DebtWorks, Inc. (collectively “Defendants”), *561 561requiring an accounting from them, and directing that Andris Pukke repatriate assets he has transferred offshore. 1The Court held oral argument on the motion and took it under advisement. On April 20, 2005 the Court entered an Order granting the Motion. This Opinion sets forth the reasons for the Court’s decision.   II.   The background of this litigation is set forth in FTC. v. AmeriDebt, 343 F.Supp.2d 451 (D.Md.2004). In brief, the FTC alleges that Defendants (except for Pamela Pukke) operated as a common enterprise to deceive consumers into paying for high-cost debt management plans in violation of Section 5 of the FTC Act, 15 U.S.C. § 45(a). After extensive discovery, the FTC filed a Motion for Summary Judgment Against DebtWorks and Andris Pukke, requesting that they be found liable, and that they be permanently enjoined and ordered to make restitution of some $172 million to injured consumers. That motion is currently pending. Meanwhile, the FTC alleges that since 2002, when Defendants became aware of the investigation that led to this lawsuit, Andris Pukke in particular has been actively dissipating Defendants’ assets by making transfers to close friends and relatives, to trusts (both domestic and offshore), and by living a lavish lifestyle. 2 For example, since 2003 Pukke and DebtWorks have transferred over $2.8 million to individuals who never worked for DebtWorks, including Pukke’s father in Latvia, his girlfriend Angela Chittenden, and his wife Pamela, as well as at least $1.6 million to a company controlled by Pukke, Infinity Resources Group. In addition, less than two months after the FTC served AmeriDebt and DebtWorks with Civil Investigative Demands in May and August 2002, Pukke attempted to establish domestic and offshore trusts which the FTC asserts were part of an effort to put his assets out of reach of the FTC and other creditors. 3 Pukke, however, appears to retain substantial control over three primary trusts: The Pukke 2002 Family Irrevocable Trust (located in Delaware with estimated assets *562 562of over $8.8 million), The P Family Trust (established under the laws of the Caribbean island of Nevis with estimated assets of $9 million), and The P II Family Trust (established under the laws of the Cook Islands with estimated assets of $1.3 million). Lastly, the FTC catalogs numerous expenditures Pukke has made out of DebtWorks’ funds to maintain personal residences, yachts and vacations unrelated to DebtWorks’ business. The FTC asserts that if this behavior is allowed to continue, there is a substantial risk that it will not be able to satisfy any final order granting equitable monetary relief that may be entered in this case.     III.   Defendants oppose the Motion for Preliminary Injunction on the grounds that: (a) the Court lacks jurisdiction to grant the requested relief; (b) the FTC has failed to meet its burden of demonstrating a likelihood of success on the merits; (c) the FTC has failed to show that the balance of equities favors the entry of a preliminary injunction; and (d) any order granting the requested relief would violate the Anti-Injunction Act, 28 U.S.C. § 2283, and improperly interfere with the priority of federal tax liens. 4   A. Jurisdiction   Pursuant to Section 13(b) of the FTC Act, “in proper cases the Commission may seek, and after proper proof, the court may issue a permanent injunction.” 15 U.S.C. § 53(b). The authority to grant such relief includes the power to grant any ancillary relief necessary to accomplish complete justice, including ordering equitable relief for consumer redress through the repayment of money, restitution, rescission, or disgorgement of unjust enrichment. FTC v. Febre, 128 F.3d 530, 534 (7th Cir.1997). To insure that any final relief is complete and meaningful, the court may also order any necessary temporary or preliminary relief, such as an asset freeze. FTC v. Gem Merch. Corp., 87 F.3d 466, 469 (11th Cir.1996). Exercise of this broad equitable authority, which is vested in the court’s sound discretion, is particularly appropriate where the public interest is at stake. Porter v. Warner Holding Co., 328 U.S. 395, 398, 66 S.Ct. 1086, 90 L.Ed. 1332 (1946) (citing Hecht Co. v. Bowles, 321 U.S. 321, 329, 64 S.Ct. 587, 88 L.Ed. 754(1944)).   Defendants contend that the Court’s jurisdiction to order the relief requested by the FTC is limited to “proper cases,” which they contend are only those in which the FTC seeks “to halt a straightforward violation of section 5 that require[s] no application of the FTC’s expertise to a novel regulatory issue,” citing FTC v. World Travel Vacation Brokers, Inc., 861 F.2d 1020, 1028 (7th Cir.1988). Defendants argue that since the FTC admitted in a press conference in November 2003 that this case involves “novel and difficult legal issues” rather than those involved in a routine fraud case, jurisdiction does not lie.   The FTC responds that a “proper case” under Section 13(b) is simply one that involves a violation “of any provision of law enforced by the Commission.”Gem

ZOKAITES v. PITTSBURGH IRISH PUBS LLC Frank R. ZOKAITES, Appellant v. PITTSBURGH IRISH PUBS, LLC and Colm McWilliams, Appellees. Argued Sept. 24, 2008. — December 11, 2008   BEFORE: KLEIN, POPOVICH and FITZGERALD, JJ.* Jeffrey A. Hulton, Pittsburgh, for appellant.Kurt L. Sundberg, Erie, for appellees.   1 Appellant Frank R. Zokaites appeals the order denying his Motion to Compel Member Interest to Sheriff as Trustee for Sale to Satisfy Judgment (Motion to Compel), which judgment was entered against Appellees Pittsburgh Irish Pubs, LLC and Colm McWilliams.1 We affirm.     2 A review of the record establishes the following undisputed facts; to-wit:   On November 21, 2005 [Appellant] obtained a judgment against [Appellees].[n. 1] On April 2, 2007, [Appellant] filed a writ of execution and unsuccessfully attempted to collect his judgment. Thereafter, on September 4, 2007 [Appellee] Pittsburgh Irish Pubs, LLC filed for bankruptcy under Chapter 11.   In an attempt to collect the outstanding judgment from [Appellee] Colm McWilliams, on September 24, 2007 [Appellant] presented to th[e trial c]ourt a Motion to Compel [․]. The Motion sought to compel [Appellee] Colm McWilliams to transfer his 20.5% outstanding member interests in [Appellee] Pittsburgh Irish Pubs, LLC and Molly Brannigans, LLC to the Allegheny County Sheriff for levy and sale. On September 24, 2007, th[e trial c]ourt granted the Motion to Compel and ordered [Appellee] McWilliams to transfer his member interests in [Appellee] Pittsburgh Irish Pubs, LLC and Molly Brannigans, LLC to the Sheriff.[n. 2]]] The Order noted that no one for [Appellees] appeared to contest the motion.   On October 3, 2007, [Appellee] McWilliams filed a Motion for Reconsideration of th[e trial c]ourt’s September 24, 2007 Order. Subsequently, th[e trial c]ourt granted the Motion for Reconsideration and vacated the order of September 24, 2007. Oral argument on the underlying Motion to Compel was held for October 4, 2007. At argument, bankruptcy attorney for [Appellee] Pittsburgh Irish Pubs informed th[e trial c]ourt of his intention to file a motion for extension of the automatic stay to [Appellee] Colm McWilliams in Bankruptcy Court. Based upon the representation of bankruptcy counsel for [Appellee] Pittsburgh Irish Pubs that the Motion to Extend the Stay would be immediately filed with the Bankruptcy Court, th[e trial c]ourt deferred a decision on the merits regarding the underlying Motion to Compel pending a decision by the Bankruptcy Court regarding the stay.   On November 27, 2007, Jeffrey A. Deller, United States Bankruptcy Judge for the Western District of Pennsylvania, entered an order denying [Appellee] Pittsburgh Irish Pubs’ Motion to Extend the Automatic Stay to [Appellee] McWilliams. Th[e trial c]ourt then scheduled re-argument on the Motion to Compel for February 11, 2008.[n. 3]   After argument on February 11, 2008 and consideration of the briefs filed by the parties, th[e trial c]ourt entered an order denying the motions to compel member interest on February 12, 2008.[n. 4].   _     Trial court opinion, 4/28/08, at 1-4, n. 1-4. Thereafter, on February 13, 2008, the order denying Appellant’s Motion to Compel was entered upon the docket pursuant to Pa.R.A.P. 301(a) (Requisites for an Appealable Order-Entry upon docket below). On March 5, 2008, Appellant filed a notice of appeal, which was followed by a Pa.R.A.P. 1925(b) statement on March 18, 2008, raising the question: “Whether the [trial c]ourt erred in holding that Pennsylvania law does not permit the [trial] court to compel the transfer of the member interest of a member of a limited liability company to the Sheriff for sale to satisfy a judgment against the member of the limited liability company?” Appellant’s brief, at 2.   3 In the process of unraveling the rights and obligations of Appellees against those of their creditors, we are guided by the principles set forth in the Statutory Construction Act of 1972, 1 Pa.C.S.A. §§ 1501-1991. See Hoffa v. Bimes, 954 A.2d 1241, 1244 (Pa.Super.2008); McCance v. McCance, 908 A.2d 905, 908 (Pa.Super.2006). Further, inasmuch as the present case involves Appellee McWilliams’ interest in various limited liability companies, the provisions of Pennsylvania’s Limited Liability Company Law2 will be examined to resolve the matter at hand. See Goldberg v. Winogradow, 2006 WL 3041979, *2, 2006 Conn.Super. Lexis 3067, *5 (filed October 12, 2006) (In assessing plaintiffs’ claim “seeking to satisfy their judgment through an order charging the defendant’s L[imited] L[iability] C[ompany] interests, analysis of the plaintiffs’ claims must be made not only in the context of [Connecticut] General Statutes § 52-356b, but also based on the limitations and guidelines set forth in the act.”). Lastly, in uncovering the intent of the General Assembly in enacting Chapter 89 (Limited Liability Companies), we may look to the Committee Comments to Chapter 89, which are intended to form the legislative history and be citable as such pursuant to 1 Pa.C.S.A. § 1939. See 15 Pa.C.S.A. § 8901 (Committee Comment-1994).   4 15 Pa.C.S.A. § 8924(a) defines “interest” of a member in a limited liability company as the “personal estate of the member and may be transferred or assigned as provided in writing in the operating agreement.” At first glance, it would appear that a member has carte blanche to transfer or assign his “interest” in a limited liability company. But the subsection cautions, “Unless otherwise provided in writing in the operating agreement, if all of the other members of the company other than the member proposing to dispose of his interest do not approve of the proposed transfer or assignment by unanimous vote or written consent, which approval may be unreasonably withheld by any of the other members, the transferee of the interest of the member shall have no right to participate in the management of the business and affairs of the company or to become a member. The transferee shall only be entitled to receive the distributions and the return of contributions to which that member would otherwise be entitled.” 15 Pa.C.S.A. § 8924(a). In the Comment immediately following Section 8924, we are further advised:   Unlike the Prototype Limited Liability Company Act, Chapter

291 B.R. 538 (Bkrtcy.D.Colo. 2003) In re Ashley ALBRIGHT, Debtor. No. 01-11367 ABC. United States Bankruptcy Court, D. Colorado. April 4, 2003   James H. Hahn, Greenwood Village, CO, for debtor. Sally Zeman, Denver, CO, Chapter 13 Trustee. Charles F. McVay, Denver, CO, for trustee.     OPINION AND ORDER ON MOTION TO ALLOW TRUSTEE TO TAKE ANY AND ALL NECESSARY ACTIONS TO LIQUIDATE PROPERTY OWNED BY WESTERN BLUE SKY LLC BRUCE A. CAMPBELL, Bankruptcy Judge.   THIS MATTER is before the Court on the (1) Motion to Allow Trustee to Take Any and All Necessary Actions to Liquidate Property Owned by Western Blue Sky LLC (“Motion to Liquidate”); (2) Motion to Appoint and Compensate Bob Karls as Real Estate Broker to the Trustee; and (3) Debtor’s Response to Trustee’s Motion to Retain Realtor and Liquidate LLC Property. Following a hearing on February 4, 2003, the parties agreed to submit the matter on briefs.   Ashley Albright, the debtor in this Chapter 7 case (“Debtor”), is the sole member and manager of a Colorado limited liability company named Western Blue Sky LLC. [1] The LLC owns certain real property located in Saguache County, Colorado (the “Real Property”). The LLC is not a debtor in bankruptcy.   The Chapter 7 Trustee contends that because the Debtor was the sole member and manager of the LLC at the time she filed bankruptcy, he now controls the LLC and he may cause the LLC to sell the Real Property and distribute the net sales proceeds to his bankruptcy estate. [2] The Debtor maintains that, at best, the Trustee is entitled to a charging order [3] and cannot assume management of the LLC or cause the LLC to sell the Real Property.   Pursuant to the Colorado limited liability company statute, the Debtor’s membership interest constitutes the personal property of the member. Upon the Debtor’s bankruptcy filing, she effectively transferred her membership interest to the estate. See 11 U.S.C. § 541(a). [4] Because there are no other members in the LLC, the entire membership interest passed to the bankruptcy estate, and the Trustee has become a “substituted member.” [5]   Section 7-80-702 of the Limited Liability Company Act requires the unanimous consent of “other members” in order to allow a transferee to participate in the management of the LLC. [6] Because there are no other members in the LLC, no written unanimous approval of the transfer was necessary. Consequently, the Debtor’s bankruptcy filing effectively assigned her entire membership interest in the LLC to the bankruptcy estate, and the Trustee obtained all her rights, including the right to control the management of the LLC. [7]     The Debtor argues that the Trustee acts merely for her creditors and is only entitled to a charging order against distributions made on account of her LLC member interest. [8] However, the charging order, as set forth in Section 703 of the Colorado Limited Liability Company Act, exists to protect other members of an LLC from having involuntarily to share governance responsibilities with someone they did not choose, or from having to accept a creditor of another member as a co-manager. A charging order protects the autonomy of the original members, and their ability to manage their own enterprise. In a single-member entity, there are no non-debtor members to protect. The charging order limitation serves no purpose in a single member limited liability company, because there are no other parties’ interests affected. [9]     The Colorado limited liability company statute provides that the members, including the sole member of a single member limited liability company, have the power to elect and change managers. [10] Because the Trustee became the sole member of Western Blue Sky LLC upon the Debtor’s bankruptcy filing, the Trustee now controls, directly or indirectly, all governance of that entity, including decisions regarding liquidation of the entity’s assets.     Because of the Court’s ruling herein, the Debtor may be entitled to a claim for her contributions made to preserve an asset of this bankruptcy estate based on post-petition mortgage payments on the Real Property. The parties were asked to brief the issue, but the Debtor has not formally asserted such a claim. Therefore, the Court does not rule on the issue at this time. Based on the foregoing, it is hereby:     ORDERED that the Trustee, as sole member, controls the Western Blue Sky LLC and may cause the LLC to sell its property and distribute net proceeds to his estate. Alternatively, the Trustee may elect to distribute the LLC’s property to the bankruptcy estate, and, in turn, liquidate that property himself; and it is FURTHER ORDERED that the Trustee’s Motion to appoint Bob Karls as real estate broker for the Trustee is hereby granted; and it is FURTHER ORDERED that the Debtor may file a claim, subject to objection in the regular course of this case, for her expenditures made to preserve an asset of this estate based on post-petition mortgage or other payments made by the Debtor.   ——— Notes:   [1] The Debtor initiated this case on February 9, 2001, under Chapter 13. It was converted to Chapter 7 by the Debtor on July 19, 2001.   [2] If the Trustee is entitled to control of the LLC, he could, presumably, as an alternative, dissolve the LLC, distribute its property to his bankruptcy estate, and then sell the property himself. The Trustee has not asserted any alter ego theory and has not attempted to pierce the veil of the LLC.   [3] The Debtor further asserts that because the LLC is “non-profit” pursuant to its operating agreement, no distribution of “profit” will ever be made and thus the value of this interest is zero. This argument erroneously assumes that a member of a Colorado limited liability company’s distribution rights are limited only to “profits.” They are not. Colo.Rev.Stat. § 7-80-102(10)(“Membership interest means a member’s share of the profits and losses of a limited liability company and the right

Plaintiff Goldin Auctions seeks a declaratory judgment that it has the legal right to sell at auction sports memorabilia of Kobe Bryant which was consigned to it by Pamela Bryant, Kobe Bryant’s mother.     Plaintiff: GOLDIN AUCTIONS, LLC Defendant: KOBE BRYANT Case Number: 1:2013cv02816 Filed: May 2, 2013 Court: New Jersey District Court Office: Camden Office County: Camden Presiding Judge: Renee Marie Bumb Referring Judge: Joel Schneider Nature of Suit: Contract – Other Contract Cause: 28:1332 Diversity-Injunctive & Declaratory Relief Jurisdiction: Diversity Jury Demanded By: None   Docket Report   Date Filed # Document Text May 2, 2013 5 ORDER TO SHOW CAUSE WITH TEMPORARY RESTRAINTS, Enjoining Deft. from interfering with the June, 2013 auction, etc.; Show Cause Hearing set for 5/14/2013 @11:00 AM before Judge Renee Marie Bumb. Show Cause Response due by 5/8/2013. Signed by Judge Renee Marie Bumb on 5/2/13. (js) May 2, 2013 4 INDIVIDUAL RULES AND PROCEDURES JUDGE RENE MARIE BUMB (bdk, ) May 2, 2013 3 Corporate Disclosure Statement by GOLDIN AUCTIONS, LLC. (bdk, ) May 2, 2013 2 SUMMONS ISSUED as to KOBE BRYANT Attached is the official court Summons, please fill out Defendant and Plaintiffs attorney information and serve. Issued By *Brian D. Kemner* (bdk, ) May 2, 2013 1 COMPLAINT against KOBE BRYANT ( Filing and Admin fee $ 400 receipt number CAM002955), filed by GOLDIN AUCTIONS, LLC. (Attachments: # 1 Civil Cover Sheet, # 2 Cover letter, # 3 Order to Show Cause, # 4 Memorandum of Law, # 5 Declaration) (bdk, ).   Access additional case information on PACER   Use the links below to access additional information about this case on the US Court’s PACER system. A subscription to PACER is required.   Access this case on the New Jersey District Court’s Electronic Court Filings (ECF) System