Tuesday, May 8, 2012

Effective Date of Judicial Dissolution

Effective Date of Judicial Dissolution
The existing statutes governing judicial dissolution are confusing as to both the process and the effective date, and for that reason they have been amended by the 2012 General Assembly to provide clarity.
The formula typically employed permitted the court to enter the decree of dissolution, including specifying an effective date of dissolution, with a directive that the decree be then filed with the Secretary of State.  What then would be the effect of a decree of dissolution not filed with the Secretary of State – the statute was silent as to whether this step is a condition precedent to an effective dissolution.  Consider also the notion of an effective date of dissolution that pre-dates entry in the public record.  According to the Secretary of State’s website a particular LLC is in good standing even as, in a trial court’s docket, it has been dissolved.
To avoid these and similar problems, a variety of statutes have been revised to make clear that the filing with the Secretary of State is a necessary step in the judicial dissolution process and to provide specificity as to the effective date, namely the latter of the date of filing by the Secretary of State or the date in the decree of dissolution.
         See 2012 H.B. 341, amending KRS §§ 76, 103, 110 and 123.

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