Specifically, the prior law failed to address two legal issues. First, it failed to address the fraudulent transfer of assets to a Nevis LLC. Second, the law contained no guidance as to the enforcement of foreign judgments in Nevis.
“The revisions were a long time coming and arguably make the Nevis LLC the most attractive on earth for asset protection,” said attorney, Gary A. Forster. “The new legislation limits fraudulent transfer claims and the likelihood of a creditor successfully reaching assets in a Nevis LLC. Also, the absence of language in the prior Nevis LLC statute left the rights of creditors holding foreign judgments completely ambiguous. The new statute is a more effective planning tool.”
Mr. Forster's language in new Section 43A requires that a creditor of an LLC member (to reach assets contributed to a Nevis LLC) prove beyond a reasonable doubt that (i) the transfer to the LLC was intended to defraud the creditor and (ii) the member was thereby rendered insolvent. The claim must be made within two years of the allegedly fraudulent contribution to the LLC.
Section 43A also includes Mr. Forster’s suggested language prohibiting (i) enforcement of foreign judgments against Nevis LLCs and their members or (ii) implementation of foreign law inconsistent with the new law. These changes will require judgment creditors to litigate their underlying claim again in Nevis, under Nevis law. “These changes are integral to our offshore practice and present substantial creditor obstacles to collection against a Nevis LLC or its owners,” said attorney Gary Forster.
Nevis also adopted Mr. Forster’s suggested language requiring that every creditor of an LLC member post bond of $1,000,000 to secure the creditor's potential liability for litigation costs incurred by the debtor member.
Attorney Gary A. Forster practices in domestic and international asset protection, sophisticated estate planning, corporate and tax law. His broad experience in domestic and international legal issues allows him to counsel businesses and individual clients regarding matters ranging from LLC and trust structuring to corporate reorganizations and tax planning. Mr. Forster is a member of the Florida and the District of Columbia Bars, and the U.S. Tax Court. He is an honors graduate of Tufts University (BA) and the University of Florida, Frederic G. Levin College of Law (JD, LL.M.). Mr. Forster is an accomplished author having written the book, Asset Protection for Professionals, Entrepreneurs & Investors, a guide to asset protection strategies for clients and their financial advisors, which is currently in its second edition. He also writes and lectures frequently on the topics of asset protection, international tax and corporate law.