Sole Member of LLC May Not Rely Upon 5th Amendment to Avoid Discovery of the LLC’s Records

Sole Member of LLC May Not Rely Upon 5^th Amendment to Avoid Discovery of the LLC’s Records

            In this February, 2021, decision from Delaware, the court was called upon to consider the assertion that the sole member of an LLC could on the basis of the 5^th Amendment resist discovery requests for the LLC’s books and records.  The argument, consistent with prior decisions on the matter, held the 5^th Amendment to be in applicable.  Wood v. U.S. Bank National Association, C.A, No. 2017-0034-JTL, 2021 WL 391610 (Del. Ch. Feb. 4, 2021).

            In response to discovery requests issued in case over Burn’s alleged looting of certain companies, he responded that he would produce only those documents “not otherwise subject to  Burns’ right to invoke the Fifth Amendment of the United States Constitution.”  Courts have previously held that the production of documents by “collective entities” does not implicate the 5^th Amendment rights of the constituents of the entity. Braswell v. U.S., 487 U.S. 99 (1988) (decided in the context of a single shareholder corporation).  In contrast, the 5^th Amendment does apply to the books and records of a sole proprietorship.  See U.S. v. Doe, 465 U.S. 605, 608 (1984).

            Finding that an LLC “has a separate judicial existence distinct from its members,” the court found that:

Burns and Heartland are distinct for purposes of the Self-Incrimination Clause.  The collective entity doctrine therefore applies, notwithstanding the fact that Heartland is a single-person entity.

Id., *5.

The Bonfire of the Vanities

 

The Bonfire of the Vanities

      Today, February 7, marks the anniversary of the Bonfire of the Vanities, an event which took place in Florence, Italy in 1497.

      Savonarola, a Dominican Friar, had been preaching against (what he perceived to be) the material and artistic excesses present in Florence, arguing in contrast for a life of austerity. He objected to the veneration shown for classical texts and images even as Florence was an epicenter of the High Renaissance. On February 7 was held the Bonfire of the Vanities, with “Vanities” including everything from ancient secular manuscripts to cosmetics to mirrors to secular (as contrasted with religious) paintings. As recited in Ivan Cloulas (trans. Gilda Roberts), The Borgias at 134, “His hold over the Florentines was such that on February 7, 1497, on the Piazza della Signoria, he set up the famous ‘bonfire of the vanities,’ on which lascivious paintings, obscene books, lutes, pomades, perfumes, mirrors, dolls, playing cards, gaming tables, and scores of other articles were confined to the flames.” Exactly what was lost cannot be known.

      Savonarola would ultimately be excommunicated by Pope Alexander VI and suffered death by hanging in 1498; his body was burnt and the ashes cast into the river. Adding to that insult, his execution took place in the Piazza della Signoria.

Will No One Rid Me of This Turbulent Priest?

 Will No One Rid Me of This Turbulent Priest?

            Today marks the 850^th 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.

            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 fleeing England for France. Furthermore, several suffragan bishops crowned Henry II’s son, thereafter the “Young King” (there was a sometimes employed tradition of crowning the heir during his father’s lifetime), in defiance of the prerogative of Canterbury to perform the coronation. That led to their excommunication.  With the intercession of papal legates the terms of Thomas’ return to Canterbury were agreed upon.

            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.  Services in the Cathedral were suspended after its desecration.  Becket was canonized barely three years later, and the four assassins were excommunicated and ordered to go on pilgrimage to the Holy Land (there are disputed accounts that thereafter at least one became a Templar).  Henry, fearful that he himself would be excommunicated, would later do public penance at Becket’s shrine in Canterbury Cathedral. That Shrine would be stripped under King Henry VIII as part of the Dissolution of the Monasteries.

The “benefit of clergy” that was the source of the dispute was not abolished in England until the mid-19^th century.

            There is a passing reference to Becket in The Lion in Winter. And don’t believe what is presented in the movie Becket – he was of Norman heritage, and was not a “Saxon.” However, for both movies Peter O’Toole was nominated for a best actor award (he received neither).

          The leading biographies of Becket are those written by Anne Duggan and Frank Barlow.  His letters were collected and edited by Anne Duggan. 

So Begins Gloriana

 So Begins Gloriana

       On this day in 1558 Mary Tudor, who would later have foisted upon her the moniker “Bloody,” died, leaving the English throne to her half-sister Elizabeth. Where Mary's reign of just over 5 years was one of tumult at the highest political levels, for at least a significant and perhaps a majority of the population it was a return to the preferred old ways, a view put forth expertly by Professor Scarisbrick in his The Reformation and the English People. Still, her marriage to Philip of Spain was never popular.  Elizabeth's reign would by contrast be seen as one of peace and growth, later dubbed the Gloriana.

       Elizabeth would rule until 1603.

       Today is as well the anniversary of the death of Reginald Cardinal Pole, who under Mary had been named Archbishop of Canterbury.  He was the last Catholic to hold that post.

Saint Crispin’s Day and the Battle of Agincourt

 

Saint Crispin’s Day and the Battle of Agincourt

       Today is the anniversary of the Battle of Agincourt, taking place in 1415 (605 years ago) between the forces of France and her various allies and the invading English forces under the command of King Henry V. Shakespeare, by having his character Henry V repeatedly refer to the day of the battle as St. Crispin’s Day, otherwise saved this obscure saint from being lost, save for experts in hagiography, to the mist of history.

            Agincourt was the third of a trio of famous battles in the course of the 100 Years War; the other two were Crecy (1346) and Poitiers (1356).  The English won all three of these battles.  In the end they lost the war.  If you should want a comprehensive review of the 100 Years War, the four volume treatment by Jonathan Sumption (The Hundred Years War I – Trial by Battle; The Hundred YearsWar II – Trial by Fire; The Hundred Years War III – Divided Houses; and The Hundred Years War IV – Cursed Kings) is authoritative.

      The English forces, likely numbering in the range of 7,000, were compelled to do battle with a numerically superior French force likely numbering in excess of 20,000. All else being equal, the English force should have expected to be annihilated. As is typical in the case of significant historical events, however, all things were not equal. The French and their allies were disorganized, and overall command of the battlefield was never achieved.  Rather, individual nobles led their own contingents forward in a disorganized and sometimes conflicting manner.  The terrain favored the English in several ways.  The French “artillery,” crossbowmen (largely Pisan mercenaries) were not effectively deployed, and they had the unenviable task of shooting uphill.  That same terrain required the French forces, both mounted and on foot, to attack uphill over a recently plowed field that, consequent to the recent rain, was more mud than dirt. The French knights and men at arms, slogging their way uphill, were a “target rich environment” for the rain of arrows let loose by the English longbows; assuming Henry’s forces numbered 7,000, likely 5,800 were longbowmen, each releasing four to six arrows a minute.

      Another factor was that the very size of the French force worked to its disadvantage in that those behind continued pressing forward, hoping for their moment of glory, even while those at the front were being slaughtered. It was not quite the situation suffered by the Romans at the hands of Hannibal at Cannae, but then likely it was not hugely better.

      While comparative casualty figures are effectively impossible to ascertain, it is clear that the French were badly mauled with significantly more casualties than the English. Further, a significant number of French nobles fell in contrast to only two English nobles. Also, a significant number of French knights who has been captured in anticipation of being ransomed were executed.  The validity of the execution order, given by Henry V, is to this day debated.

      For an excellent review of the battle, see Juliet Barker's Agincourt: Henry V and the Battle That Made England. It is also covered in volume four of Sumption’s treatise.

      As invented by Shakespeare in Henry V, Scene iii, the St. Crispin’s Day speech would immortalize Henry V:

WESTMORELAND. O that we now had here

But one ten thousand of those men in England

 That do no work to-day!

 KING. What’s he that wishes so?

 My cousin, Westmoreland? No, my fair cousin;

 If we are mark’d to die, we are enow

 To do our country loss; and if to live,

 The fewer men, the greater share of honour.

 God’s will! I pray thee, wish not one man more.

 By Jove, I am not covetous for gold,

 Nor care I who doth feed upon my cost;

 It yearns me not if men my garments wear;

 Such outward things dwell not in my desires.

 But if it be a sin to covet honour,

 I am the most offending soul alive.

 No, faith, my coz, wish not a man from England.

 God’s peace! I would not lose so great an honour

 As one man more methinks would share from me

 For the best hope I have. O, do not wish one more!

 Rather proclaim it, Westmoreland, through my host,

 That he which hath no stomach to this fight,

 Let him depart; his passport shall be made,

 And crowns for convoy put into his purse;

 We would not die in that man’s company

 That fears his fellowship to die with us.

 This day is call’d the feast of Crispian.

 He that outlives this day, and comes safe home,

 Will stand a tip-toe when this day is nam’d,

 And rouse him at the name of Crispian.

 He that shall live this day, and see old age,

 Will yearly on the vigil feast his neighbours,

 And say “To-morrow is Saint Crispian.”

 Then will he strip his sleeve and show his scars,

 And say “These wounds I had on Crispin's day.”

 Old men forget; yet all shall be forgot,

 But he’ll remember, with advantages,

 What feats he did that day. Then shall our names,

 Familiar in his mouth as household words-

 Harry the King, Bedford and Exeter,

 Warwick and Talbot, Salisbury and Gloucester-

 Be in their flowing cups freshly rememb’red.

 This story shall the good man teach his son;

 And Crispin Crispian shall ne’er go by,

 From this day to the ending of the world,

 But we in it shall be remembered-

We few, we happy few, we band of brothers;

 For he to-day that sheds his blood with me

 Shall be my brother; be he ne’er so vile,

 This day shall gentle his condition;

 And gentlemen in England now-a-bed

 Shall think themselves accurs’d they were not here,

 And hold their manhoods cheap whiles any speaks

 That fought with us upon Saint Crispin’s day.

 

           HERE IS A LINK to Kenneth Branagh’s masterful rendition.

          Not recited in the list of nobles who were part of the battle was Edward of Norwich, the Duke of York (a grandson of Edward III)   He was killed while defending the king.

            In 1420 Isabeau of Bavaria, queen to the incapacitated Charles VI, signed the Treaty of Troyes, granting the French Crown to Henry V and his heirs in place of her son. Further to that treaty, Henry V married Catherine of Valois; she would be the mother of Henry VI with the Valois inherited mental instability that would contribute to the Cousins War (a/k/a the War of the Roses); HERE IS A LINK to a discussion of that situation. Henry V died in 1422. Joan of Arc would join the fray in 1429; while she would be in the field was than a year and a half she helped turn the tide, and the 100 Years War would end with England holding only the region of Calais.  It would be lost in the reign of Mary (a/k/a Bloody Mary).

“Let There Be Light,” On October 22, 4004 b.c.

 

“Let There Be Light,” On October 22, 4004 b.c.

       The Book of Genesis begins “In the beginning God created the heavens and the earth.” Genesis 1:1.  At some time thereafter “Then God said, “’Let there be light;’ and there was light.”  Genesis 1:3. Then “God divided the light from the darkness, … called the light Day, and the darkness he called Night. And the evening and the morning were the first day.” Genesis 1:4 - :5.

      According to calculations made by James Ussher, Archbishop of Armagh, as set forth in The Annals of the World Deduced from the Origin of Time and continued to the beginning of the Emperor Vespasian’s Reign (the title goes on from there), that first moment of creation took place at the onset of evening (6 p.m.) proceeding October 23, 4004 b.c.  These calculations were made by working backwards from the birth of Jesus in 4 b.c. (Ussher accounted for Dionysius’ error in calculating the year of Jesus’ birth) based upon the ages of the Patriarchs and the Kings of Israel as set forth in the Old Testament.

      By Ussher’s calculations, October 23 would have been a Sunday, the first day of the seven day week described in Genesis that would conclude on Saturday, the Sabbath day of rest. 

      Ussher’s dating of the Exodus from Egypt to 1491 b.c. comports with the modern scholarship of its dating (to the extent it took place as a historic event) to a so called “early Exodus.”

      Ussher’s chronology achieved its fame by being incorporated into numerous Bibles, they sometimes listing its dates in marginal notes.  Numerous similar chronologies, including one by Isaac Newton and another by the Venerable Bede, failed to be so referenced and faded into obscurity. Bede placed creation in 3952 b.c., but he made no effort to determine the precise day and time.

     Of course it is all malarkey; the age of the Earth is measured in billions, not thousands, of years.  In addition, and just to be snarky, if Creation took place at 6 p.m., was that Eastern Standard Time?

      October 22 is also the anniversary of the “Great Disappointment,” the failure of the Second Coming predicted for 1844 by William Miller and certain of his disciples based upon their interpretation of Biblical texts.  When October 23, 1844, dawned the fallacy of their prediction was laid bare.

 

LLC In Chapter 7 Bankruptcy Not Obligated to Remit State Taxes on Behalf of Out-of-State Members

 

LLC In Chapter 7 Bankruptcy Not Obligated to Remit State Taxes on Behalf of Out-of-State Members

      In Business Law Today, Jonathan M. Stemerman and I have published a short review of the decision rendered In Re: North Carolina Tobacco International, LLC, 2020 WL 4582282 (Bankr. M.D. N.C. Aug. 10, 2020), which addresses the fact situation of a state law requiring an LLC to remit estimated payments on behalf of out-of-state members when the LLC is in bankruptcy. Cutting to the chase, the court held that the LLC in bankruptcy was not subject to this obligation.

       HERE is a link to that article.