Posted by Bill K. (AZ) on March 31, 1999 at 23:33:02:
Bill Bronchick says, “If the member whose interest is charged decides to stop distributing income to himself to avoid the creditor, a court would probably consider this act to be a fraudulent transfer. A possible solution would be for the member to sell a small interest to another member who is unrelated to himself. This ‘remaining member’ could then vote to stop the distributions. If the sale of the interest was for fair value, then there would arguably not be a fraudulent transfer. If the LLC operating agreement required unanimous approval for distributions of profits, then there would technically be a ‘deadlock’”.
From “How to Form Your Own Limited Liability Company and Family Limited Partnerships”
I hope this helps.
Bill K. (AZ)