If Ihave equity in an LLC from an employment settlement andthe companyis now being sold, are there any legal options that I can pursue to get a buy-out?
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If Ihave equity in an LLC from an employment settlement andthe companyis now being sold, are there any legal options that I can pursue to get a buy-out?
I was an executive in an LLC with an employment contract. After 2 1/2 years we decided to part ways and eventually reached a settlement based on my contract. I was able to retain my .75% equity in the LLC. I have heard via grapevine that they are selling off a major piece of the company. I would like to get them to buy out my equity. I have sent an email to the CEO who is the owner/president and have not had a reply. Are there any legal options that I can pursue?
Asked on August 20, 2010 under Business Law, Massachusetts
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
Unfortunately, probably not. This is an issue that usually is--and needs to be--dealt with my contract; i.e. when you receive an interest in the company, you should make sure that you have an agreement that requires them to buy your interest out (either automatically or at your option) in certain circumstances. Without such an agreement, a minority owner, especially one who, per your question, owns less than 1% of the company, has very few rights. Being such a minority owner is essentially an unprotected position.
So if you have an agreement requiring them to buy your interest, you can enforce it. In the absence of such an agreement, you may not have any recourse.
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