A former website that prominently promoted sex trafficking is losing its Delaware incorporation status.
A Chancery Court judge has ordered that four LLCs linked to Backpage relinquish their Delaware certificates of formation.
The move comes after the Delaware Department of Justice petitioned the court in November 2018 to have the LLC status removed due to Backpage's involvement in "criminal activities" linked to sex trafficking. Delaware DOJ called the order precedent-setting.
“Delaware law now allows for the Attorney General’s office to petition for the cancellation of a company’s formation due to ‘abuse or misuse of its limited liability company powers, privileges or existence,’” Attorney General Kathy Jennings said in a written statement. “In this first use of that power with regard to LLCs, DOJ and the Court have set a precedent for using that power to address a company whose formation was largely used to promote criminal activity.”
Backpage has already ceased operation, forfeiting its assets to the federal government.