Legal Question in Real Estate Law in Missouri
Here is the scenario - 3 business members/partners form an LLC to purchase a building in St Charles MO. The LLC still exists but 2 members of the LLC have forced the 3rd member out of the building and also do not provide information on the financial status, etc of the LLC to this 3rd member.
The building has a mortgage and upon formation of the LLC and purchase of the building, the spouse's of the member were told they had to sign forms so they could secure the mortgage or purchase - the spouses were told these forms were no big deal and that they were required by the bank. After the formation of the LLC, one of the spouses came to believe that these forms were a guarantee on the mortgage and the member of that spouse stated that the LLC would be refinancing and this would take care of that. Refinancing never occurred.
After the 2 members forced out the 3rd member, they refused to provide any information so this 3rd member could sell off his investment. This 3rd member secured an appraisal to move the process forward but the other 2 members laughed at any offers. The animosity continued and I was told by this 3rd member that the LLC is not providing him any information on the status of the LLC - P&L's, etc.
Come last night, I was at a meeting at the County Building in St Charles and noticed on the Tax Certificate sale that the LLC has not paid taxes on this building for 2 years. I believe that the building will be auctioned on Mon Aug 23rd (but I do not understand these sales).
My concern is what ramifications could come to the spouse? What can she do to protect her assets as well as the assets of her family? Is there any recourse she can take?
The spouse of the member did contact the mortgage lender a few years back about being removed as a guarantee on the loan and she sent letters requesting this. She spoke with their small business manager and was told they could do this IF she brought some of her business to this bank (such as a mortgage on another building that she has). She felt like this was extortion or not legal so she put that on hold.
Also, it has come to the attention of the spouse of one of the members, that one of the other members of the LLC has used LLC money to purchase personal items, such as braces for a daughter.
1 Answer from Attorneys
You entered a long fact pattern, but asked no question. But, under the facts you described, it appears that anyone who purchases the property at the tax sale, may have a greater claim to the property than the LLC.
Good luck
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