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Suddenly voted out of LLC

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Karmah2

Junior Member
What is the name of your state (TX)
I am part of an LLC where I have 24%, my partner has 26% and his daddy has 50% (to be dissolved and split between me and my partner once debts are paid as he is a primary financial backer of the business)
After over 2 years of very hard work, on Monday,10/19, I was suddenly and without any notice, voted out of my LLC partnership, asked for my keys and told this is because somehow I am a liability to the company. In reality, it is my skillsets which have allowed us to open a 2nd location and not go under our 1st year. I am being pressured to sign, told I must either accept #1) 15k, and a stipulation I will not open a similar place of business within 5 miles, or #2) Retain my shares but be on the hook for $140,000 in bank loans when I am quite sure the business will tank without my being a part of it to govern things, or #3) The LLC may be disbanded and all I will receive is the monetary capital (roughly 5k) which I put into the business.
Most of my contribution is sweat equity and the business expertise which my partner frankly does not have. I went into business with him because his dad had the money and I had the Skills, so it seemed a good fit. Now that there are two stores open, I feel I was dismissed so that my partner can enjoy all the profits we are about to make. I am waiting for a copy of the Operating Agreement, if we have one. I was left out of all the financials and am not sure how to get a hold of that information. My partner handled the finances. My expertise is in running things and keeping the employees and public happy. What should I do, what are my options? Can I really be voted out, just like that? Is there a nepitism case here?What is the name of your state (only U.S. law)?What is the name of your state (only U.S. law)?
 


Mass_Shyster

Senior Member
You really need to see an attorney. The other shareholders cannot absolve you of responsibility for the $140K. Only the lender can do that.

I would very leery of any agreement they are pushing you to accept.
 

antrc170

Member
You really need to see an attorney. The other shareholders cannot absolve you of responsibility for the $140K. Only the lender can do that.

I would very leery of any agreement they are pushing you to accept.
You definetly need an attorney for something like this. If the loan was granted to the LLC, and you are no longer a part of the LLC then you won't be responsible for such. The first option you presented sounds like a buy-out of your shares...are they worth $15000? The second is to keep your options and your share of the profit but also the liability, and the third is something you need to be concerned with. The LLC can dissolve if any member chooses to terminate and no one is willing to take the extra expense. Then the LLC can be dissolved according to the agreement, or by any other manner. You definetly need an attorney because some states don't allow for automatic recovery of investment.
 

tranquility

Senior Member
You might see an accountant as well. The only way you would be on the hook for $140K in bank loans to the LLC is if you made a personal guarantee for that amount. If you did, your share of that money should be considered a part of your basis in the LLC.
 

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