Legal Question in Business Law in California

I am an investor in a small restaurant LLC. Profits were mistakenly (questionable) diverted to another restaurant that manager has. Other restaurant is unable to pay back all the money and is making payments. Is there a way the shareholders of this small restaraunt can have a say in getting back the money misdirected?? money is $30k. I am a 2.5% shareholder.


Asked on 9/21/09, 7:47 pm

2 Answers from Attorneys
John Gibson

You likely have several options. If the Manager was not allowed to use those funds for another restaurant he breached his obligations to the LLC at the very least. What you and the other members (owners of an LLC are members, not shareholders) can do depends on what has happened and what the Operating Agreement allows for. To help you better I would need to get a more detailed understanding of what happened and what your best options are.

Feel free to contact me if you need any more help.

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Answered on 9/21/09, 10:51 pm
Terry A. Nelson Nelson & Lawless

That is what lawsuits are for, if the parties can't resolve it informally. Shareholder lawsuits are against the management of their company for misconduct. Shareholders and directors could call a special meeting to vote to demand the company take legal action as appropriate, or could 'fire' the management and replace them. If serious about taking such legal action, feel free to contact me.

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Answered on 9/22/09, 3:32 pm


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