How can I collect on a membership in an LLC?

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How can I collect on a membership in an LLC?

I invested 150k in an LLC 6 years ago giving me a 10% membership. The LLC bought a 20 year old profitable manufacturing company. I went to work there as a manager. After 6 declining years the company was sold by the lenders in an asset sale and my 10% was wiped out. The new owners kept me on for a short while and I was discharged. As part of my hard copy separation agreement I was given a 2% membership in the new LLC that purchased the company. The company is in one state and I am located in another. How can I collect on my 2%. How would valuation be determined?

Asked on July 30, 2012 under Business Law, Massachusetts

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

In order to ascertain how your 2% ownership interest is to be bought out in the limited liability company that you have an ownership interest in, you need to get a copy of the operating agreement of the entity and review it carefully. Most likely the operating agreement will set forth how you get your 2% interest in the entity cashed out.

Valuation is typically established by an independent third party appraiser.


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