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LLC Question 151

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Question: My brother and I inherited a 325 acre tract of land from my Grandfather. We have subsequently dissolved the estate and turned the assets into an LLC. The major asset in the LLC is the land which I prefer to sell as I don't live near the property. My brother wishes to keep the property and certainly cannot afford to buy my percentage of the LLC. What are my options?

Response: What was to be done with the property should have been hashed out while the estate was open before distributing it into an LLC which I assume you and your brother now own 50% of with no operating agreement. The situation you are describing is management deadlock. As each of you own 50%, neither LLC member can take action regarding LLC assets without the assent of the other. Thus, if you cannot reach agreement with your brother on a sale of the property or a buyout, I see only two possible approaches. First option: partition of the property. Divide the property equally into two parcels, your 50% LLC interest is redeemed in exchange for one of the parcels with the remaining parcel staying in the LLC (which your brother now owns 100%). Of course, this route requires agreement from your brother. Second option, hire a lawyer and sue your brother to have the LLC dissolved upon the theory of management deadlock. Link.

Submitted: 11/28/2007; Sam, Florida
Response: 11/28/2007; JJR

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