Posted by John Merchant on July 07, 2010 at 18:50:13:
If you had a new LLC formed showing his name as owner and President, but then had your name in Operating Agreement showing you as the real owner of the LLC and your having all the rights to make decisions, etc. that could work for both of you.
i.e. the Op Agrmt, not being a public record anywhere, would not divulge or disclose to the whole town that you’re even involved, unless he chose to make it public.
And the new DOT on the property could be explained by his telling any questioners that he did it so as to publicly show the property is now liened, but the lien is really to himself*, as just being there (to HIS own) LLC so other potential creditors wouldn’t see any equity there should they choose to sue him on anything.
This is a common device (fiction but legal) employed by lots of very prosperous investors to make it look like they’re hocked to the hilt when they’re really not.
Or he could just deed the property into the new LLC and that’s a frequently used tactic when considering tort liability, “dram shop” actions* against negligent bar tenders, etc. as LLC has limited liability.
If the 2 of you do this, I’d recommend some lawyer in a far-away town do the LLC for you, as it’s unfortunately true that lawyers and/or their staffs aren’t the world’s greatest at keeping confidences.
Should they be? Of course. But should and is are quite different.
His local state’s Liq. Lic. Agency will have some rules about ownership and operation of a bar but the lawyer employed can check that for you.
*Suits against bars and bar tenders for serving a drunk who then goes out and kills somebody through his intoxication.
