Capital Infusions Are Now Trust Funds Too

In AC Excavating, Inc. v. Yale (Colo. App. Sept. 2, 2010), the Colorado Court of Appeals held that money loaned to an LLC by its manager qualifies as a disbursement, and can be the basis of a trust fund violation and theft claim against the manager if the funds are not used to pay subcontractors and suppliers.  As the dissent notes, "[a] lawyer familiar with today's holding likely would advise the manager not to recapitalize the company if there was any doubt as to the project's ultimate success."