Legal Question in Business Law in Massachusetts
I invested 150k with a LLC 6 years ago giving me a 10% membership. The LLC bought a 20yr 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 separation agreement I was given a 2% membership in the new LLC that purchased the company. The company is based in Massachusetts and appears to be doing well. I live in another state. Question: How can I collect on my 2% stake? How would valuation be determined? Am I entitled to financial reports? Thank You.
2 Answers from Attorneys
You would need to take your separation agreement and your LLC operating agreement to an attorney for review. While you have certain statutory rights as the member of the LLC (assuming this was actually done), I believe it is possible that your rights may be altered or expanded based on the terms of the operating agreement. I would be happy to speak with you if you are interested in moving forward.
Normally, the owner of an LLC like any shareholder would be entitled to a copy the company tax returns and you should be gettng a K-1 for each fiscal year indicating your income or loss from the company.
However, without seeing the separation agreement I cannot be sure what your situation is.
Pleae feel free to contact me at your convenience.
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