Three of us were members of an LLC that owned a beauty salon and day spa filing on 1065. The other members included my daughter and another young lady. The LLC signed a lease for space in a shopping center to build out the beauty salon. My wife and I personally guaranteed the lease payments.
Our LLC sold the beauty business in June of 2016, but my wife and I were still bound by the lease guarantee through February of 2019. After the sale of the beauty business our LLC filed final taxes and K-1's at the end of 2016. But the purchasing LLC and it's members ran the business into the ground and filed bankruptcy in the fall of 2018, leaving about $50,000 in unpaid rents through February of 2019.
My wife and I personally paid the lease and legal expenses because of our guarantee. We settled for about
$35,000 in back rents and about $10,000 in legal fees. Our LLC was also named in the lawsuit, but it had wound down and filed all final returns. And my two partners didn't have any money (or burning desire) to share in the settlement.
