 |
|
   |
 |
|
Ask a Lawyer -- LLCs
LLC Question 156
Question:
I am an equal partner in a LLC called JAC Aquisitions Group that has 3 partners. JAC owns a 50% share of another LLC called the T-Shirt Shoppe. The other 50% is owned by one individual. He has made references to selling his half so we made an offer and everyone agreed on it, although nothing has been put on paper or finalized. Now a freind has made an offer to him that is the same as our deal but with a little more money. Is there a way we can keep this other guy out of our deal? Is there a way to be first up for buying out our partner? Thanks
Response: If the competing bidder for the 50% interest in T-Shirt Shoppe were one of your fellow LLC members in JAC Acquisitions, then I think you might have an argument that the member is violating a fiduciary duty owed to the LLC (something akin to the corporate opportunity doctrine). But, if I read the question correctly, the competing bidder is an independent party, not one of the LLC members of JAC.
Transfer of LLC interests. If the competing bidder is independent, then I do not think the sale of the 50% interest in T-Shirt Shoppe, LLC can be prevented unless there is some sort of prohibition on sales of LLC interests in the LLC operating agreement or other LLC member agreement. The MedLawPlus.com® LLC operating agreement template has an option for inserting such language into the agreement. See Article VII. I assume by the question that T-Shirt Shoppe, LLC either does not have an operating agreement or said agreement does not touch on the issue of member transfer of LLC interests.
Approval of new members. But what does the buyer of an LLC interest own? Can the buyer demand to become a member of the LLC? Florida's LLC law states the following on the subject:§608.4232 Admission of additional members.--Except as otherwise provided in the articles of organization or the operating agreement, no person may be admitted as a member unless a majority-in-interest of the members consent in writing to the admission of the additional member. Link My reading of the Florida statute is that the buyer cannot become a member of T-Shirt Shoppe, LLC without a majority in interest approving. Your group controls 50%, therefore, no new member may be admitted without your approval. The way I see it, absent a provision in the operating agreement to the contrary, the buyer ends up as an assignee of the seller's LLC interest (unable to join in management or vote the LLC interest) but entitled to all distributions allocated to this LLC interest.
A local attorney may see things differently. As always, the best course of action is to retain counsel for a legal opinion.
Submitted: 12/21/2007; Chris , FL
Response: 12/27/2007; JJR
Add A Comment
|
|
Ask a Lawyer LLC Archives
DISCLAIMER
The above is provided for informational purposes only and is NOT to be relied upon as professional advice. The information presented on this site comes without any warranty of correctness and, therefore, should not be relied upon. This service is not a substitute for the advice of a professional. No attorney client relationship is created through use of this site.
|
|
 |
   |
|
 |
