How to navigate purchasing property from a dissolved LLC or INC

Question

Hey BiggerPockets Family :-)

I ran across a property that is owned by a dissolved Corporation in Atlanta with back taxes and the CEO has passed away based on my research of the members on the corporation.  However the CFO seems to be alive and local.  Before reaching out, I wanted to get some advice on how to approach getting the sale to go through.  The corporation has been dissolved for 20 years now.  Is it possible to purchase this property and if so what would the Seller need to do in order to sell.  I haven't done a deal with this situation before.

Thanks ahead of time for all your guidance.

Best,

Jae

Stephen Harlan · Answer

In Georgia, a corporate or LLC entity cannot be reinstated after it has been dissolved for over 5 years. Unfortunately, a simple reinstatement isn't going to work here.

Assuming that the dissolution was administrative in nature, the company continues its corporate existence but can only carry on business necessary to liquidate and wind up the company's affairs. Conveying property titled in the corporate name would almost certainly qualify as winding up. There is a process, though. Georgia Code Cite Here!

We've handled a number of closings from dissolved companies. While they may take more work than most, they're certainly do-able.

Michaela G. · Answer

Years ago I bought some properties from a bankrupt mortgage company. The closing attorney worked very closely with the title company attorney ahead of time, so, that we had all of our ducks in a row.

This is obviously a different scenario, but just to let you know that it can be done. Bankruptcy trustee wanted to have nothing more to do with it (Plaza mortgage bankruptcy was huge and fraud involved by an employee. No way did they want to reopen that can of worm) and I had that in writing.

I went to the archives in East Point and looked at the bankrupcy file to get the original managing partner's names and contacts. It took signatures by 2 of the 3 original officers.

One really important thing: I had originally come across this for 1 property and I asked an attorney what to do, if the bankruptcy trustee doesn't want to deal with it. He said 'where there's one, there might be more....'. So, I did some reverse searching (spent about a week in the morgue, tracing every property that Plaza mortgage was ever involved in) and found 10 properties that hadn't been dealt with, all hanging out there.......I got them all.....was very worth it. So, do some more searching...you might get lucky.

Tom Gimer · Answer

Absent a court order, the deed would need to be from the current owner of record (the entity) to the purchaser. The easiest solution would be for a person with authority to reinstate or revive the entity. That may require making years of required corporate filings and paying years of fees.

It’s also possible that your CEO was the sole shareholder of the defunct entity and, if so, disposition of this asset should have been handled through his/her estate.

Sounds like a lot of work to piece this together... who knows, might be worth it. For another angle look into purchasing at tax sale.

Jae Morenike · Answer

@Tom Gimer Thank you for taking the time to respond.  I am not sure of how the corporation was dissolved, there isn't any information on it at all on the Sec. of State site for the company.  Only the Articles of Incorporation from 1981.  But from what I see the CEO passed away around the time the dissolution occurred which is shown on SOS site but no details.  I just wanted to know if I could possibly try to purchase directly from them or not with this situation.  I hope this helps to clarify.

Tom Gimer · Answer

The question lacks details necessary to answer it.

Was the corporation voluntarily dissolved? Judicially dissolved?

Or, more likely, was the corporation’s charter simply revoked/forfeited? If this is the case, the corporation was never wound up (assets marshaled and distributed to the shareholders).

How to navigate purchasing property from a dissolved LLC or INC

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