Legal Question in Business Law in Tennessee

I am working on getting out of a "business arrangement"(my part - cashier and bookkeeper), an LLC and a commercial lease. I am willing to leave it all to "partner" and pay 3 months rent on the shop to help her out, if she will allow me to walk away. The landlord has said he will let me off the lease if it is agreed by all parties involved. The lady calls me numerous times a day to say that if I dont give her $$$ she is going to file bankruptcy. The shop is stocked, set up ( with alot of fixtures, furniture and shelves from the previous shop) and ready to go. I am not asking anything for my time or my mother's time, for working at a craft booth so money for the shop could be raised, and money (minimal, about 1K) that has already been given to her by me in order for her to get a shop again. It was a group effort and she is the only one to have anything to show for it, A STOCKED and READY TO GO SHOP. She is demanding that I pay her the show money. She already has it, it got the shop ready. I am ready to offer her the 3 months rent on the shop, to be paid directly to the landlord and an extra 1K for her to let me off the paper work. Now she is wanting 5K and threatening bankruptcy. Very unreasonable. Calls me constantly. I had to order caller I.D. Can she file bankruptcy when all parties involved are in agreement except her? Can she as she says "stick it to me" if I don't meet her demands?

P.S. I make 11K/yr. I have no savings. I only have a house and it isn't paid for yet.

Looking forward to hearing from you.

Thank you,

Jeanne


Asked on 1/26/10, 6:35 am

1 Answer from Attorneys
Caitlin Moon C2Law

If you and the "partner" you refer to in your question are both members of an LLC as part of this business venture, then your first step is to refer to the operating agreement for the LLC. This is the contract that sets out the members' obligations to one another, and what happens if a member wants to exit the LLC.

If there isn't a written operating agreement, you should create a written document setting forth the terms you agree to in terminating your membership - e.g., payment of 3 months rent in advance paid to the landlord, etc. The document should state specifically that your membership in the LLC is being terminated, and should be signed by all members of the LLC.

The LLC is a distinct legal entity. Your partner's decision to file for bankruptcy protection is a separate matter and would be based upon her personal situation. Her ability to "stick it to you" (as stated in your question) would depend on your obligation to her vis a vis this busines - and that depends on the structure of the LLC.

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Answered on 1/31/10, 8:54 am


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