Bankruptcy of A LLC Member

An attorney asked me about a prospective bankruptcy client who owned one-third of a Florida limited liability company. The client was sure that their filing bankruptcy would automatically terminate the LLC. The LLC did not have an operating agreement.

Where an LLC does not have a written operating agreement the LLC operates under default provisions provided by Florida Statutes. Florida Statute 608.411 (2) provides that as long as there is at least one remaining LLC member, the bankruptcy, death, expulsion, retirement or resignation of a member , or any other event that terminates the continued membership of that member shall not cause the LLC to be dissolved. Therefore the bankruptcy of a LLC Member does not dissolve the LLC as long as there remains at least one member in good standing.