Thursday, November 1, 2018

At Least In Passing, Court Addresses Capacity to Sue of Series of Series LLC

At Least In Passing, Court Addresses Capacity to Sue of Series of Series LLC

      In a recent decision from Florida, the court, in what is probably ultimately dicta, addressed the question of whether a series LLC may for itself litigate rights assigned to a series thereof. The answer was no. MSP Recovery Claims, Series LLC v. USAA General Indemnity Company, case No. 18-21626-civ-Altonaga/Goodman, 2018 WL 5112998 (S.D. Fla. Oct. 19, 2018).
      The question in dispute in this suit was whether MSP Recovery Claims, Series LLC (“MSP Recovery”) could assert claims with respect to certain Medicare payments, the question ultimately turning on whether it was a Medicare Advantage Organization. Addressing the question of whether the purported rights, which had allegedly been assigned to an individual series of MSP Recovery, the court wrote:
Second, the Series Contract, purporting to assign rights from MSP Recovery to Series 16-05-456, LLC, is deficient, as it purports to transfer rights created under a Recovery Agreement dated April 28, 2015. The Recovery Agreement is actually dated April 28, 2016. And the named Plaintiff is MSP Series, not even Series 16-05-456 LLC. A “series” is similar to a corporation with subsidiaries, and parent corporations lack standing to sue on behalf of their subsidiaries. (Citations to record and other authorities omitted).
      There were no citations to the controlling law and no discussion of whether a series has the capacity, under both law and the controlling operating agreement, to bring suit in its own name.

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