Nevada Supreme Court Holds Conversion Vests Converting Corporation's Nevada Business License In Converted LLC
NRS 107.028 lists a number of different categories of persons who may serve as trustee under a deed of trust. One category is domestic or foreign entity which holds a current state business license issued by the Secretary of State pursuant to chapter 76 of NRS. Prestige Default Services ("Prestige Corp.") was a California corporation that held a Nevada business license and converted to Prestige Default Services, LLC ("Prestige LLC"). California Corporations Code Section 1158 provides that upon a conversion taking effect, all the rights and property, whether real, personal, or mixed, of the converting entity or converting corporation are vested in the converted entity or converted corporation.
In Mahban v. Prestige Default Services, LLC, Nev. S. Ct. Case No. No. 84166 (March 9, 2023), the plaintiffs argued that Prestige LLC was not qualifed to serve as trustee because it did not hold a valid Nevada business license. The Nevada Supreme Court, citing Section 1158, found "Because a Nevada business license is a right that vests in a converted entity, the district court did not err in concluding that Prestige LLC had a vested right in Prestige Corp.'s Nevada business license, and thus, held a valid business license."