In In Re Albright, what does a bankruptcy trustee obtain in a single-member LLC?

• A. The court restricts the trustee to a charging order on distributions
• B. The trustee obtains the debtor's full membership interest and control of the LLC
• C. The trustee can only seize non-exempt assets outside the LLC
• D. The trustee has no authority to manage LLC affairs

Answer: (B)

In a bankruptcy context, the trustee can reach the debtor’s ownership in a single-member LLC because the debtor is the sole member. When a case is filed, the debtor’s membership interest becomes property of the bankruptcy estate, and with no other members to share control, the trustee effectively steps into the debtor’s role. That means the trustee acquires the full membership interest and the authority to manage the LLC, allowing them to oversee distributions, operations, or even liquidate assets to maximize value for creditors. This is why the correct understanding is that the trustee obtains both the debtor’s full membership interest and control of the LLC.

Charging orders are typically a remedy against distributions in multi-member LLCs, not a single-member situation, so that option doesn’t fit here. The membership interest itself is an estate asset, so seizing only non-exempt external assets isn’t accurate. And the trustee does have authority to manage the LLC under these circumstances, so the notion of no authority isn’t correct.