Jonathan Hayes of BankruptcyProf Blog wrote this post about a 9th Circuit Court of Appeals case where a majority owner and manager of an LLC had taken much of the LLC's business assets for his personal use.  When he declared bankruptcy, he tried to have his debt to the LLC (and the other owners) discharged, i.e. forgiven in the bankruptcy. 

The 9th Circuit court ruled that the debt could not be forgiven because the debtor had been acting as if he was trustee of a trust.  By taking trust assets for his own benefit he had engaged in wrongful behavior.  Where that bad behavior resulted in a debt he could not try to escape that debt by declaring bankruptcy.

Does this weaken the asset protection of LLCs which weren't foolproof in the first place?  I don't think so.  It just means don't steal from the other members of yourr LLC and expect to get away with it.