Charging Order Lien Survives Bankruptcy; Violation of Charging Order to be Addressed Through Contempt Powers of the Issuing Court

 Charging Order Lien Survives Bankruptcy; Violation of Charging Order to be Addressed Through Contempt Powers of the Issuing Court

A recent decision from the Bankruptcy Court for the Southern District of New York addressed two important question, namely (i) does the lien created by a charging order survive the charged member’s bankruptcy? and (ii) how are violations of the terms of a charging order to be remedied.  In short (i) “yes” and (ii) “by the contempt powers of the issuing court.”  All in all a sobering reminder of the importance of compliance with charging orders. In re Campbell, 2026 WL 84544 (Bankr. S.D.N.Y. Jan. 12, 2026).

Joe Campbell had been held responsible to pay on a promissory note of some $305,000 owed to Vision Bank, predecessor to Radiance Capital Receivables Twelve, LLC, the plaintiff in this adversary proceeding.  In that original trialaction, after a determination of liability, numerous charging orders were issued against various LLCs in which Campbell was a member both directing that all distributions that would be made to Campbell be diverted to the judgment creditor:

IT IS ORDERED that a lien is charged against the financial interests of [the Debtor] in the [LLCs] in the amount of $317,135.00, being the final judgment of September 9, 2013, rendered in favor of [SEPH] and against [the Debtor], plus accrued interest and costs, and that [the LLCs] are Ordered to distribute to [SEPH] any income, officer's fees, bonuses, distributions, salaries or dividends paid or otherwise conveyed to [the Debtor] by reason of any interest he owns in the [LLCs] until [SEPH] is satisfied in full. 

Further, each LLC was ordered to notify the judgment creditor “each time a distribution subject to this [charging] order was made.”

It will come as no surprise that these instructions were not followed.  In fact the LLCs made no reported distributions to Campbell even as their assets were used to pay his expenses. When the judgment creditor moved for sanctions to enforce the charging orders Campbell filed for personal bankruptcy, and the automatic stay prevented the issuing court from taking further action as to enforcement of the charging orders it has issued.  The judgment creditor then instituted this adversary proceeding. This decision was in response to competing motions for summary judgment.

Three matters were considered, namely:

(i) Did § 523(a)(2)(a) and its bar to discharge of an obligation obtained by actual fraud prevent discharge of the judgment for the bank debt?;

(ii) Did § 523(a)(6) and its prohibition against discharge of a “willful injury” apply?: and

(iii) Does the charging order lien on his interests in the LLCs survive Campbell’s bankruptcy?

In short, the answers were (i) “no,” (ii) “yes,” and (iii) “yes.”

§ 523(a)(2)(a)

As described by the court:

Section 523(a)(2)(A) exempts from an individual debtor's bankruptcy discharge, among other things, “any debt ... for money ... to the extent obtained by ... actual fraud ....” Courts typically rely on the common law of torts when analyzing “actual fraud” under section 523(a)(2)(A). As stated, Radiance Capital argues that the Debtor's transfer of funds violated Alabama fraudulent transfer law and gave rise to a debt owed to Radiance Capital, separate from the Judgment, that is nondischargeable under 11 U.S.C. § 523(a)(2)(A). 2026 WL 84544, *9 (citations omitted)

Campbell would prevail on this point, it being found that the debt at issues, the original $305,000 loan from Vision, was not procured by fraud and Campbell’s interference with the collection of the judgment thereon did not go to the terms and issuance of the initial obligation. 

As stated above, the underlying debt at issue is based on the Debtor's default of a business loan. The Debtor did not obtain the loan by committing fraud. Further, the money loaned to the Debtor by Vision Bank in 2007 “is obviously not traceable” to the transfers from the LLCs years later. 2026 WL 84544, *11.

§ 523(a)(6)

As described by the court:

Section 523(a)(6) exempts from an individual debtor's bankruptcy discharge “any debt ... for willful and malicious injury by the debtor to another entity or to the property of another entity.” 11 U.S.C. § 523(a)(6). The “word ‘willful’ in (a)(6) modifies the word ‘injury,’ indicating that nondischargeability takes a deliberate or intentional injury, not merely a deliberate or intentional act that leads to injury.” Further, section 523(a)(6) encompasses “intentional torts” rather than “negligent or reckless torts,” and intentional torts “generally require that the actor intend ‘the consequences of an act,’ not simply ‘the act itself.’ ”

“The injury caused by the debtor must also be malicious, meaning ‘wrongful and without just cause or excuse, even in the absence of personal hatred, spite, or ill-will.’ ” “Malice may be implied by the acts and conduct of the debtor in the context of the surrounding circumstances.” 2026 WL 84544, *12 (citation, internal quotation marks, and alteration omitted).

The court’s application of this provision / law was as follows:

In Count II, Radiance Capital argues, among other things, that the Debtor “knowingly violated the [Charging Orders] in an effort to thwart [Radiance Capital's] security interest in the distributed funds.” (Complaint ¶ 60.) “Failure to obey a court order constitutes willful and malicious conduct, and a judgment against a defiant debtor is excepted from discharge.” Quoting a Western District of New York bankruptcy court decision, the Fifth Circuit in Williams explained that damages resulting from an intentional violation of a court order are ipso facto the result of “willful and malicious” injury:

[W]hen a court of the United States ... issues an injunction or other protective order telling a specific individual what actions will cross the line into injury to others, then damages resulting from an intentional violation of that order as is proven either in the Bankruptcy Court or, so long as there was a full and fair opportunity to litigate the questions of volition and violation, in the issuing court are ipso facto the result of a “willful and malicious injury.”

This is because what is “just” or “unjust” conduct as between the parties has been defined by the court.... An intentional violation of the order is necessarily without “just cause or excuse” and cannot be viewed as not having the intention to cause the very harm to the protected persons that order was designed to prevent.

It follows, therefore, that monetary sanctions levied against a party for intentionally violating a court order are per se nondischargeable under section 523(a)(6). As one court observed:

[W]here there is an order of a court finding a debtor in contempt for violating an earlier court order, for purposes of establishing a willful and malicious injury under § 523(a)(6), it is conclusively presumed or established by that contempt order that (1) the debtor's conduct caused an injury to the other party, and (2) that the sanctions awarded are a “debt ... for [that] injury ....” In other words, a debt arising as a result of a violation of a court order does not require proof of an injury beyond showing that the court order was knowingly violated, and neither the existence of an injury nor the amount (or reasonableness) of damages from an injury need be established beyond showing that the court imposed sanctions on the debtor for the violation.

A party who violates a charging order under Alabama law may be held in contempt. 

The record here establishes that the Debtor knowingly violated the Charging Orders. The Charging Orders required the LLCs to make distributions to Radiance Capital that are otherwise payable to the Debtor “by reason of any interest he owns in the [LLCs]” until the Judgment was fully satisfied. The Charging Orders also required the LLCs to notify Radiance Capital each time a distribution subject to the order was made. In contravention of the orders, the Debtor caused Whigham Place to make dozens of transfers directly to the Debtor throughout the decade following the entry of the Charging Orders. Whigham Place is a single-asset real estate company that collects rent proceeds from its ownership of commercial real estate in Alabama, and the Debtor provided no business justification for Whigham Place's transfers of funds to the Debtor. These transfers must therefore be viewed as transfers on account of the Debtor's ownership and control of Whigham Place in violation of the Charging Orders.

The remainder of the transfers were technically made to third parties but were for the benefit of the Debtor. Transfers from Whigham Place to WB Property were used to fund the Debtor's living expenses as he used WB Property's bank account “as a personal checking account.” 

Transfers from Whigham Place to Clairise Court and Able Builders represented funds that were purportedly payable to the Debtor but were instead deposited into the accounts of the latter two entities. The Debtor characterized these as “salary” payments to himself,but that assertion lacks merit. Although the Debtor owns Whigham Place, he is not an employee of, or otherwise entitled to salary from, Whigham Place.20

The transfer from Antilles GP to Marina similarly represented funds that were purportedly payable to the Debtor but were instead transferred to Marina. The Debtor admitted that he caused Antilles GP to return a prior capital contribution to him and transferred those funds to Marina. The return of a prior capital contribution can be seen as nothing other than a distribution on account of the Debtor's equity interest in Antilles GP.

Last, the transfers from Whigham Place to JP Morgan paid sizeable balances for three JP Morgan credit card accounts held in the name of “John F. Campbell Clairise Court LLC.” As set forth above, the Debtor routinely used the credit cards to cover his personal expenses including attorney's fees to his divorce attorney. 2026 WL 84544, *12-14 (citation, internal quotation marks, and alteration omitted).

The court quickly disposed of Campbell’s argument that compliance with the charging orders was not required as they were subordinate to the IRS’s lien, writing:

This argument lacks merit. As the Supreme Court explained, absent a stay pending appeal, a party subject to an order must comply with the order “promptly” and may not make “private determinations” about the legal effect of that order:

We begin with the basic proposition that all orders and judgments of courts must be complied with promptly. If a person to whom a court directs an order believes that order is incorrect the remedy is to appeal, but, absent a stay, he must comply promptly with the order pending appeal. Persons who make private determinations of the law and refuse to obey an order generally risk criminal contempt even if the order is ultimately ruled incorrect. 2026 WL 84544, *14-15.

Survival of the Charging Order Liens

​The court quickly addressed the question of whether the charging order liens susvided Campbell’s bankruptcy, writing:

In Count III, Radiance Capital seeks a declaratory judgment that the liens created by the Charging Orders survive the Debtor's bankruptcy discharge. “[L]ienspass through bankruptcy unaffected” unless they are avoided23 or otherwise addressed. The same is true for liens created by charging orders. 

Here, the liens created by the Charging Orders are valid and have not been avoided or otherwise addressed in this bankruptcy case. Therefore, such liens survive the Debtor's bankruptcy discharge. 2026 WL 84544, *16-17.

Enforcement to of the Charging Orders Through Contempt Powers

While this bankruptcy court found Campbell to have acted in violation of the issued charing orders, it was stated as well that it is the Alabama court that first issued the charging orders that should address the contempt: 

Therefore, while it is appropriate for this Court to determine whether the Debtor engaged in “willful and malicious” conduct within the meaning of 11 U.S.C. § 523(a)(6), the Alabama District Court must be the court that issues the contempt order for the Debtor's violations of the Charging Orders. To facilitate the Alabama District Court's determination of appropriate sanctions, this Court will modify the automatic stay sua sponte to permit Radiance Capital to continue prosecution of the Sanctions Motion or otherwise seek sanctions for the Debtor's violations of the Charging Orders in the Alabama Action. 2026 WL 84544, *16.

The Death of Catherine of Aragon and the Fall of Anne Boleyn

 The Death of Catherine of Aragon and the Fall of Anne Boleyn

Today is the anniversary of the death in 1536 of Catherine of Aragon, first wife of King Henry VIII and before that the wife of his brother Arthur (d. 1502), she having been put aside so that Henry could marry Anne Boleyn.  Catherine’s death at minimum contributed to and by some assessments precipitated Anne’s fall.

After the death of his older brother Arthur, who had married Catherine in 1501, for a variety of reasons including an unwillingness to return to Catherine her dowry and a desire to continue the linkage of the upstart Tudors to the united (and rich) crowns of Aragon and Castile, justified in part by Deuteronomy 25:5-10 and Genesis 38:8, Henry married Catherine.  

While Catherine became pregnant several times, only one child survived infancy, that being Mary.  Henry could not allow the succession to be imperiled thru no male heir (his illegitimate son Henry FitzRoy was not a viable candidate for the throne; the Tudor claim to legitimacy already being tainted by succession through the female line), so he began casting about for alternatives.  Focusing upon Leviticus 18:16 and 20:21 he asserted the marriage was in violation of canon law, and for that reason had been cursed as evidenced by the lack of male children. In doing so he conveniently ignored the fact that a Papal dispensation has been issued specifically sanctioning the marriage, that dispensation necessary as Henry (and Arthur before him) was related (distantly but within the otherwise prohibited degree) to Catherine.  Cutting to the chase Henry installed the (as to this matter) obsequious Cranmer as Archbishop of Canterbury, who at his consecration manifestly violated his oaths, who then declared the marriage of Catherine and Henry illegitimate. 

Through much of these machinations Anne Boleyn was waiting about.  She was the daughter of Thomas Boleyn, courtier and based on the record a dedicated social climber, and the niece of Thomas Howard, the Duke of Norfolk and a leading magnate. Anne’s older sister Mary (cite The Other Boleyn Girl to me as evidence Anne was older and … well I don’t know but it will not be pleasant) had been Henry’s mistress and Anne committed to not be in that role.  In 1533, while visibly pregnant, Anne and Henry were married; she was pregnant with Elizabeth, later Queen Elizabeth.

But then Anne had trouble getting again pregnant and suffered a number of miscarriages. Historian Retha Warnicke has made the case that Anne and Henry had rH incompatibility such that the first pregnancy could come to term but subsequent pregnancies would miscarry.

So Henry is still at first base; all of his legitimate children were girls and he needed a male heir.  Meanwhile he had the itch of knowing he married Anne after an illegitimate “divorce” (technically it was an annulment) from Catherine to the effect the marriage to Anne was itself illegitimate.  And here Henry could go back to his playbook - just as the defective marriage to Catherine had not produced a male heir so too had the marriage to Anne.  What more proof could be needed?

Catherine’s death would now precipitate Anne’s fall; with Catherine dead Henry could have the marriage to Anne set aside (the compliant Cranmer issued that decree) and as his former spouse Catherine was no longer of this world he could move on to a new marriage, this time to Jane Seymour, untainted by a hint of bigamy. And just to make sure there would be no lingering doubts Anne’s departure from this world would be accomplished by the sword of the Calais executioner after a farcical show trial of Anne and a bevy of others Henry and Cromwell wanted removed. Henry had the common decency to wait 12 days after Anne’s execution to marry Jane Seymour.  She would die of complications of the birth of the future Edward VI, who would die childless, leading to the reign of Mary Tudor (a/k/a Bloody Mary in the terminology of the English protestants) and then Elizabeth, she being the last Tudor on the English throne.

The best (by far) biography of Anne Boleyn is that by Eric Ives, The Life and Death of Anne Boleyn: 'The Most Happy'.  Garrett Mattingly’s Catherine  of Aragon and Giles Tremlett’s  Catherine of Aragon: Henry's Spanish Queen are both well done (although not nearly as in-depth as Ives’ Boleyn). The definitive treatment of the legal aspects of Henry’s efforts to divorce Catherine is the long out-of-print but now republished as in the public domain The King’s Great Matter:  A Study of Anglo-Papal Relations, 1527-1534 (de Clinton Parmiter).

Piercing the Veil in Indiana – Alter Ego / Instrumentality

                               Piercing the Veil in Indiana – Alter Ego / Instrumentality

A recent decision from Indiana applied that state’s laws as to the alter ego approach to piercing the veil.  Tomich v. White, 267 N.E.3d 1161 (Aug. 29, 2025) (table), opinion at 2025 WL 2487968.

This decision arose out of the trial court’s grant of summary judgment to the plaintiff, so the factual record is somewhat sparse.  Michaline Tomich, on behalf and as a member of MIYO, LLC, signed and delivered a promissory note to Aimee White.  Needless to say it was not satisfied, and White brought suit to compel payment. Some partial payments were made but not by MIYO, LLC; rather those payments were made by MIYO, Inc. and Mixdesign, Inc., companies controlled by Tomich.

After a helpful review of Indiana’s law on piercing, including the caution against piercing as it sets aside the generally applicable rule of limited liability, including among the participants in a group/ company hierarchy, it writing:

The corporate alter ego doctrine allows courts to “disregard the separateness of affiliated corporate entities when they are not operated separately” but are instead “managed as ‘one enterprise through their interrelationship to cause illegality, fraud, or injustice or to permit one economic entity to escape liability arising out of an operation conducted by one corporation for the benefit of the whole enterprise.’ Our Supreme Court has delineated an additional four factors to be considered when faced with a claim under the corporate alter ego doctrine: “(1) similar corporate names were used; (2) the corporations shared common principal corporate officers, directors, and employees; (3) the business purposes of the [organizations] were similar; and (4) the corporations were located in the same offices and used the same telephone numbers and business cards.” Moreover, “[t]hese ‘single business enterprise’ corporations may be identified by characteristics such as ‘the intermingling of business transactions, functions, property, employees, funds, records, and corporate names in dealing with the public.’ ”  (¶ 18, citations omitted)

 Then the court considered the facts before it and found that piercing was justified in that Tomich used the assets of MIYO, Inc. and Mixdesign, Inc. to pay the obligation of MIYO, LLC:

White’s designated evidence, when considered in the light most favorable to Defendants, shows that Tomich through MIYO Inc. and Mixdesign, Inc. made payments on the Promissory Note despite not being parties thereto; MIYO Inc. and Mixdesign, Inc. share the same principal office address; and Tomich is the President of both MIYO Inc. and Mixdesign, Inc. as well as a purported member of MIYO, LLC. Furthermore, MIYO Inc. and MIYO, LLC share similar corporate names. Based on this designated evidence, White has made a prima facie showing that Tomich’s control of all three of these business entities and her use of MIYO Inc. and Mixdesign, Inc. to pay MIYO, LLC’s debts lead to the conclusion that Tomich managed these businesses as one enterprise rather than as separate but affiliated entities. That is, White has made a prima facie case that these three businesses were merely an instrumentality of Tomich, and to allow Tomich to use them as a shield to protect herself from liability under the Promissory Note would constitute a fraud or promote injustice in this case. (¶ 20)

Perhaps there would have been a different outcome if Tomich had caused each of these organizations to lend funds to the borrower and it had then made payments in its own name.

There is a curious issue mentioned but not resolved in the case, namely whether MIYO, LLC actually exists as a business entity.  It does not appear the plaintiff put to record evidence that it does not exists, and the defendant did not demonstrate that in fact it does.

First, considering White’s designated evidence in the light most favorable to Defendants, we cannot say that MIYO, LLC is a nonentity; after all, the Promissory Note states that MIYO, LLC is an entity that received funds. We do note, however, that Defendants did not designate any evidence demonstrating that MIYO, LLC does, in fact, exist. ¶ 19.

Had that point been resolved, and it been shown that MIYO, LLC does not exist, Tomich could have been found personally responsible on the promissory note at issue under principles of agency law and specifically the rule that a purported agent on behalf of a non-existent principal is personally responsible in the contract at issue. That would have been a cleaner treatment than recourse to the extraordinary remedy of piercing.

It does not appear that any appeal was filed.

An LLC Must be Represented by an Attorney, Except Maybe Not In Louisiana

 An LLC Must be Represented by an Attorney, Except Maybe Not In Louisiana

It is the accepted rule that while a natural person has the right to represent themselves in court, no similar right extends to business organizations, and but for the most narrow of exceptions (e.g., small claims court in Colorado), an LLC must be represented by an attorney.  These rules exist to protect against the unauthorized practice of law by non-attorney managers and owners who might seek to represent their organizations.  The cases as to this rule are collected in Ribstein and Keatinge on Limited Liability Companies section 13:8 (Dec. 2025).

A recent decision from Louisiana has in at least that jurisdiction brought this rule into question. Ela Group, Inc. v. Bradley Murchison Kelly & Shea, LLC, 420 So.3d 680 (La. Oct. 14, 2025).

The facts are somewhat sparse, but it would seem that a construction company, through its nonlawyer president, filed a complaint against the company’s former law firm.  Later the company retained counsel and filed an amended complaint.  The firm, which apparently had objected to the initial complaint, renewed its objection as to a complaint filed by a non-attorney.  Both the trial court and the court of appeals upheld the dismissal of the complaint, determinations reversed by the Louisiana Supreme Court.

After recounting its authority to regulate the legal profession, the Court first observed:

La. R.S. 37:212(B), defining the practice of law, provides that “[n]othing in this Section prohibits any person from attending to and caring for his own business, claims, or demands.” Jurisprudence in our appellate courts has limited the scope of that exception only to natural persons. Considering this Court’s plenary authority to define and regulate the practice of law, and in light of the fiduciary obligation of officers to protect the rights of their corporate entities, we find it appropriate to allow the officers of juridical persons to file time sensitive actions on their behalf.  

To the extent that prior jurisprudence held that the original filing  is vacated solely because it was filed by a corporate officer for a juridical person, those cases are abrogated.  420 So.3d at 681 (footnote omitted). 

From there is was directed that a “corporate entity” should promptly retain counsel to represent it before taking further action in the case. 420 So.3d at 682.

As detailed in footnote 1 to the opinion, decisions abrogated include:

See, e.g., Wholesale Auto Grp., Inc., v. La. Motor Vehicle Comm’n, 17-613 (La. App. 5 Cir. 5/23/18), 247 So. 3d 215, writ denied, 18-1017 (La. 10/8/18), 253 So. 3d 795 (holding a petition filed by a person not licensed to practice law in Louisiana was without legal effect); Bankston v. Tasch, LLC, 2009-1573 (La. App. 4 Cir. 6/2/10), 40 So. 3d 495 (finding answer filed by sole member of legal entity was unauthorized practice of law and had no legal effect). 420 So.3d 680, n. 1.

And then of perhaps the greatest import for the LLC bar, the Court in its second footnote wrote:

A single-member LLC that is a disregarded entity for federal and state tax purposes may be represented by its sole member in the same manner as a natural person under federal regulations. 26 CFR 301.7701-3. Rev. Proc. 2002-69, clarifies that this treatment extends to an LLC managed by a spouse held as community property. We find that these disregarded entities should be treated the same as the underlying natural person for all purposes of La. R.S. 37:212(B).  420 So.3d 680, n. 2.

Tellingly, this sanction of a non-attorney representing a disregarded entity (a tax treatment) in state court is not restricted to filing an initial pleading followed by retaining counsel, but rather would appear to sanction the non-attorney member representing the entity throughout the proceeding. Whether this rule will be extended beyond the SMLLC / Rev. Proc. 2002-79 (spouses in a community property jurisdiction) deemed SMLLC circumstances to MMLLCs remains to be seen. 

The Governor and Company of Merchants of London Trading into the East-Indies

 The Governor and Company of Merchants of London Trading into the East-Indies

      Today constitutes the anniversary of the founding, in 1600, of the company originally chartered as the “Governor and Company of Merchants of London Trading into the East-Indies,” which came to be known as the British East India Company and, at times, simply “the Honorable.” Technically it was a joint stock company rather than a corporation, and its organizational structure continues through to modern business organization law, most notably in the separation of ownership (divided into shares) and management (a board). 

      Originally formed to engage in spice trading, its affairs would ultimately be focused upon India even as it maintained outposts throughout the world. Its operations in India were in effect a private territory of the company where it would maintain a private army exceeding 250,000; at that time, the British Army comprised some 125,000. The size of its fleet is hard to comprehend; at times a ship about one and a half ships docked in England each day.  It was only after the 1856 rebellion that the British government assumed direct control of India.

The Company was dissolved in 1874.  The Company-State, by Philip J. Stern, is an excellent review of its activities. HERE IS A LINK to the text of the original charter.

Will No One Rid Me of This Turbulent Priest?

 Will No One Rid Me of This Turbulent Priest?

      Today marks the anniversary of the murder in 1170 of Saint Thomas Becket.  This murder has always been the most serious stain upon the reign of King Henry II

     Of Norman descent (the movie Becket inaccurately has Henry referring to Becket as a Saxon), Becket rose to be appointed Lord Chancellor of England.  While Chancellor Henry nominated Becket (who at this time was not a priest) to the position of Archbishop of Canterbury, clearly hoping that Becket would use his power as primate of England to mold ecclesiastical policy in favor of royal interests.  Becket failed to do so, rather becoming an ascetic and placing the interests of the Church over those of the crown.  Eventually he was forced to resign as Lord Chancellor.

     The contest of wills between Henry and Becket over the Constitutions of Clarendon, they seeking to increase the power of the civil state over the Church and its constituents, led to a final break in the relationship, with Becket even fleeing England for France.  Eventually he would return to Canterbury.

      While in France and likely well into his cups, Henry made a statement (exactly what was said is lost to history – there are conflicting accounts) that was interpreted by four knights as a direction to kill Becket.  They crossed the Channel and challenged Becket in Canterbury Cathedral, there killing him.  Becket was canonized barely three years later, and the four assassins were excommunicated and ordered to go on pilgrimage to the Holy Land (at least one of them thereafter became a Templar).  Henry would later do public penance at Becket’s shrine in Canterbury Cathedral.

            There is a passing reference to Becket in The Lion in Winter.

Is An Assignment a Means of Avoiding the Rule an LLC Must be Represented by an Attorney?

Is An Assignment a Means of Avoiding the Rule an LLC Must be Represented by an Attorney?

The rule is that artificial legal bodies such as corporations and LLCs may appear in court only through a licensed attorney; with only vanishingly small exceptions such as some small claims courts a corporation or LLC cannot appear in court “pro se” through an officer or manager.  It has as well long been the rule that an organization cannot assign its claim to an individual in order to circumvent that rule. A recent decision from South Dakota brings the application of that rule into question.

 In Thomas Mattson v. Rosebud Elec. Cooperative, 2025 WL 3208889 (D.S.D. Nov 17, 2025), after the LLC’s previous action was dismissed for lack of personal jurisdiction and a declaration that the LLCs must be represented by attorneys, the LLCs assigned their claims to the apparent sole member, who then filed this action. While this action would be on the merits dismissed , as to pro se representation the court wrote:

In federal court, corporations and LLCs must be represented by counsel and may not proceed pro se. “While 28 U.S.C. § 1654 protects parties rights to plead and conduct their own cases, that right has never been interpreted to allow an individual to appear for a corporation pro se.”  A non-lawyer who seeks to represent the interests of a corporation or an LLC “constitutes the unauthorized practice of law and results in a nullity.”  An assignment does not alter this rule: “Federal courts have refused to countenance circumvention of the requirement that a corporation be represented by counsel through the corporation’s assignment of a claim to a non-lawyer.”  Id., *23 (citations omitted).

But then the court stated:

Prelude’s alleged assignment of its claims to Mattson at least in this instance does not circumvent “the requirement that a corporation be represented by counsel through the corporation’s assignment of a claim to a non-lawyer.” Mattson cannot bring Prelude’s claims pro se and is not purporting to do so. The motion to strike is denied, but for reasons explained above, the case must be dismissed. Id.

On what basis the court would have allowed the non-attorney to prosecute those assigned claims when it had already stated the rule “An assignment does not alter this rule” is unclear.