Ask a Business Lawyer. Get Business Law Questions Answered ASAP.
It is under the LLC
Neither of us is particularly well off, however his ace in the hole is a motorhome that the LLC owns. His wife borrowed money though a line of credit to finance that purchase. That unit is up for sale and we have had offers, should sell in the next week or 2. Since his wife has the lien, he will not be force to pay off the loan, however, the majority of the sale price will transfer to him (his wife) to satisfy the lien. He then has that cash available, assuming he utilizes the cash and continues making payments vs paying it off. He has disclosed this to me.
You are required to distribute LLC assets in a particular order. You first must pay creditors, including LLC members who are creditors, to the extent permitted by law. Note that it is particularly important that you pay all outstanding taxes. Then, unless your formational documents provide otherwise, you must make any required “interim” distributions to current and former LLC members. (For example, a distribution might be due to a member because he or she previously withdrew from the LLC). Finally, if any assets remain, and unless your operating agreement provides otherwise, you should (a) return to members any contributions they made to the LLC; and then (b) make distributions to members in the proportions in which they share in distributions.
One other key task is giving notice to creditors and other claimants of your LLC's dissolution. Giving notice is optional. However, doing so will help limit your liability and also allow you to more safely make final distributions to members.
Under Virginia law, one way to give notice is by sending a written document directly to known claimants after the effective date of dissolution. Proper written notice must:
You also may give notice to other (unknown) claimants by publishing in a newspaper. As with sending direct notice to individual claimants, there are specific rules for giving notice through publication. Generally speaking, claimants have three years after the date of newspaper publication to bring a claim.
Thanks for the great news. That is 90% of it, but the question remains regarding the inventory. That is the bulk of assets owned by the company. I can easily divide the sales of that inventory from anything acquired afterwards so that distribution is fair (of course liabilities paid first). There has been dispute over how to value the inventory, however, if we can just wait until it sells, there is little room to argue. The loan bears my signature alone.
The basis was the "Net" proceeds from the sales. That would be the estimated retail sales price - Amazon fees, other costs = Net (with no regard to cost). Cost value of inventory in stock is approx. $54,000, Net proceeds were estimated at $86,400, however, when he was on the buying side he wanted to take $20k off the cost side before valuing it because he considered that "dead inventory", inventory with a small probability to sell in the next 180 days. My estimation is that a true number is XXXXX $10k cost that is dead. Again, if we had to value it now, at cost, approx $54k is a number I would not argue too much about.
Also, all the merchandise is new retail goods, no antiques or hard to value items.
DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.
The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).