If the situation was such that Allen had owned the underlying interest in the family limited liability company in his own name and someone was successful in suing him personally and forcing him into bankruptcy he would lose control of the entire structure as the trustee in bankruptcy would be sitting in Allen’s shoes as the sole member of the family limited liability company and could then get access to all of the other group assets.
If however, the interest in the family limited liability company was owned by an offshore trust, the trustee in bankruptcy would need to bring a claim against the trustee of the trust. For that claim to be honored it would need to be first brought in a U.S. court and then taken to the country in which the trust is established and then brought in local court.
Each of these countries mentioned above have specific trust rules, which make it more difficult for foreign judgments to be enforced. It is also extremely costly to enforce a U.S. claim in a foreign court.
All of these factors will deter Allen’s creditors from enforcing a U.S. claim against his foreign trust.