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In re Albright (2003)

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In re Albright (2003)

Citation: 291 B.R. 538 · Court: U.S. Bankruptcy Court, District of Colorado · Decided: April 4, 2003 · Opinion: Bruce A. Campbell, Bankruptcy Judge.

Source note (2026-10-18):

  • Links on this page to https://static.case.law/br/291/cases/0538-01.json are an (unofficial Caselaw Access Project copy, retrieved before 2026-10-18; host disallows automated access); no official or otherwise permitted full-text copy was located on 2026-10-18.

Facts

Ashley Albright was the sole member and manager of Western Blue Sky LLC, a Colorado LLC that owned real property in Saguache County. She filed Chapter 13, then converted to Chapter 7. The LLC itself was not a debtor. The Chapter 7 trustee moved for authority to liquidate the LLC’s property; the debtor argued that the trustee, standing in creditors’ shoes, was limited to a charging order against distributions under the Colorado LLC Act (C.R.S. § 7-80-703).

Holding

Because there were no other members, the debtor’s entire membership interest passed to the bankruptcy estate under 11 U.S.C. § 541(a) and the trustee became a substituted member with full management rights. The trustee “controls the Western Blue Sky LLC and may cause the LLC to sell its property and distribute net proceeds to his estate,” or may distribute the property to the estate and sell it himself.

Reasoning

  • C.R.S. § 7-80-702 (as then in force) required unanimous written consent of the “other members” before a transferee could participate in management; with no other members, no consent was needed.
  • The charging order exists “to protect other members of an LLC from having involuntarily to share governance responsibilities with someone they did not choose”; in a single-member LLC “there are no non-debtor members to protect,” so the limit “serves no purpose.”
  • The court noted the result would differ in a multi-member LLC, where a transferee without consent receives only distributions (citing Mountain States Bank v. Irvin, 809 P.2d 1113 (Colo. App. 1991), and Union Colony Bank v. United Bank of Greeley, 832 P.2d 1112 (Colo. App. 1992)).

Practical impact

  • Buyers: the decision concerns the Chapter 7 trustee’s succession to a sole member’s interest and liquidation of LLC-owned land, not a completed chattel auction or an ordinary creditor’s automatic management rights outside bankruptcy.
  • Owners/debtors: single-member LLC status gives little protection against a Chapter 7 trustee.
  • Current §§ 7-80-701/-702 were independently read in the 2026 official title 7. Section 702 now limits an unadmitted assignee to distributions, with admission governed separately; its former unanimous-written-consent wording is not the current text. Do not substitute this bankruptcy holding for current foreclosure/admission analysis.

Good-law status

needs_verification. Full historical opinion, including footnotes, independently read on October 17, 2026 in the reproduction at source_url; the site’s editorial/AI synopsis is not the authority. The earlier Case Law Access Project URL is preserved as provenance; a fresh 403 does not negate an earlier successful retrieval.

Distinct later treatment: Condo v. Conners, 266 P.3d 1110 (Colo. 2011), full opinion, cites Albright, 540 n.6, concerning operating-agreement flexibility. Its anti-assignment holding is not approval of every extension of the single-member bankruptcy result. Current statutory text and this limited citation were checked; comprehensive subsequent treatment/appeal history remains unverified.

Bounded final review (2026-10-18)

Full opinion re-read 2026-10-18 from the Caselaw Access Project (unofficial, verbatim). Later treatment actually checked: Condo v. Conners, 266 P.3d 1110 (Colo. 2011) (full opinion) cites Albright only for operating-agreement freedom (n.6). Comprehensive later treatment remains needs_verification. The Caselaw Access Project copy was saved before the site’s robots.txt (which disallows all automated access) came to this review’s attention; it is kept as evidence only and no further automated requests were made to static.case.law.

Applies in →

colorado · equity-interests-stock-llc-charging-orders · businesses-and-going-concerns

Legal information, not legal advice. Historical holding and limited later treatment only; verify current law and case history before relying on this page.

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