Merrill Ranch Properties, LLC v. Austell[1] involved a bank loan to an LLC, secured by certain property in Arizona and guaranteed by an affiliated individual and eight trust entities he controlled. At some point, the loan was declared in default and the bank filed a lawsuit in Arizona against the borrower and the guarantors to recover the balance of the loan. The lawsuit eventually settled. Subsequently, however, the plaintiff discovered that shortly after the loan was declared in default, three LLCs with corporate relationships to the guarantor transferred certain assets to various newly-created entities that were, in turn, directly or indirectly owned by trusts controlled by the guarantor. … Read the rest
