Legal Question in Business Law in Maryland

My Brother and I bought 35% of an LLC together. In the contract that we have, the 2 Business owners that we bought from signed off that they had no outstanding debts or liens on the business. This turned out not to be the case. They had a lien on 50% of the business. He also was supposed to use the purchase money for future expenses and operating costs but used $10k of it to pay back rent on the leased space and never told us about it. Then he walked out in the middle of August and never came back. He obviously voided the contract, does this mean that we have no legal ties to the LLC because of the voided contract? I talked to a local lawyer on October 3rd. He was supposed to call me within 48hrs and its now Nov 3rd and won't return my calls.


Asked on 11/03/11, 3:01 pm

1 Answer from Attorneys
Cedulie Laumann Arden Law Firm, LLC

Your post raises a number of legal issues. If you consummated the sale then you likely remain an owner /member unless you can set aside the purchase. Resolving the current situation may require litigation. Seller misrepresentations would not automatically revert ownership back to the seller. You may have claims for fraud or misrepresentation against the sellers. In some cases there may also be issues of compliance with securities laws.

In short, your available remedies will depend on the specific facts, the actual purchase agreement and operating agreement related to this LLC.

You are strongly encouraged to seek legal representation including a review of the purchase/sale agreement and any related warranties. If the first attorney you called is not interested in pursuing the case you may want to get a second/third opinion.

Note that this answer provides general legal information and is not a substitute for specific legal advice.

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Answered on 11/03/11, 3:43 pm


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