Legal Question in Business Law in Colorado

Conflict of intrest

I am a member of a Colorado registered LLC. For cause a resolution reducing the shares of one member is being voted on. This member has an admitted, ongoing affair with another member. Question: Can the other partners of the LLC require the other member to recuse herself from this vote? Is there a specific rule?


Asked on 4/15/07, 3:17 pm

1 Answer from Attorneys
Robert Murillo Pivotal Legal Ltd.

Re: Conflict of interest

Morning:

I assume you have an operating agreement that provides for a reduction in their ownership (the units) in the event of "cause" and that cause is appropriately defined in the operating agreement.

If you have a cause provision, it should provide that the party who is being accused of a violation cannot vote. Contact an attorney because an action to withdraw equity must be done by agreement and must be done in accordance with fiduciary duties. Contact counsel or you are asking for a lawsuit.

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Answered on 4/16/07, 12:03 pm


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