Bankruptcy of one member of a four member LLC recorded prior to auction sale. Grounds for rescision?


#1

Lets say a home is purchased at auction by an investor. The foreclosed homeowner is a LLC with 4 members. One of the members has 25% ownership and declares bankruptcy the day of the auction sale. The BK is recorded before the auction sale. Could this be grounds for the sale to be rescinded? I am most concerned of putting money into the home and having it taken back at what I bought it for…and lose what I put in. Thanks…


#2

I’m not an attorney, but I seriously doubt it. I believe the LLC itself would have to declare BK to stop the sale.