Clients in the United States/California face predatory creditors, and massive amounts of litigation:
1. In 2011, in California there were 1,085,189 civil lawsuits filed in the state;
2. In 2011, in the U.S. District Courts, there were 289,252 lawsuits filed in the federal courts.
Informed investors seek asset protection to preclude third party creditor attachment of investment assets.
An asset protection strategy for investors (who hold a minority LLC interest; i.e., less than 50%) includes “tiered LLCs”. (LLC #1 holds the investment portfolio in LLC #1 the investor owns 25% of the LLC). The investor owns the 25% of LLC #1, in a wholly-owned LLC (LLC #2). An attaching creditor who seeks to enforce a judgment against the investor in his individual capacity, will be unable to attach the investment portfolio held in LLC #1 or the membership interest in LLC #1, held by LLC #2.