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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Business Law
Satisfied Customers: 111605
Experience:  All corporate law, including non-profits and charitable fraternal organizations.
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As I mentioned before all partners of the LLC are having serious

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As I mentioned before all partners of the LLC are having serious differences which I fear could impact the successful running of the business. My partners are giving us high time and keeping us in suspense as to when the business will open. They don't want to sell the business or want to work with us. Since none of us can buy out each other (our LLC is deadlocked), we are stuck right now. My partners are revealing their options.

Right now we have a construction loan with a bank who have arrangement with SBA to package as a SBA 504 loan after the construction is completed.

The value of the property is much higher than the loan as we have put considerable amount of money from our pockets. After the loan closes (construction loan to regular loan), can I approach SBA and explain the situation and explain the situation and ask them to sell the property to the highest bidder?
Will SBA and the bank agree to this?
Thank you for your new question.

The SBA will not get involved in the LLC disagreement. You would need to go to court I am afraid to get a court order to sell the property or if you default on the loan you can let them foreclose, but that is not the option you would really want, because that too would cost you getting an attorney to go to court. This means that you are not going to avoid the attorney representing the LLC as all of you disagree on what to do here and SBA will not agree to resolve your disagreement for you I am afraid they will make you resolve your dispute and if you want to sell they will tell you to put it up for sale.




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Customer: replied 3 years ago.

I told my partners that I can't afford to pay monthly expenses if the business doesn't open. If I don't pay the mortgage and let the property foreclose will the bank accept offers from our broker who says she has interested buyers who can buy for a very large amount? Or would the bank use their own brokers to sell the property which may not be optimal for us? My partners don't want to sell the property nor want to work with us. So it's unlikely they will go to court to dissolve the LLC. they don't want to work with us also. So what options do my partners have ?

Thank you for your response.

If the bank forecloses then it is up to your LLC and the bank I am afraid to decide whether they will accept a short sale. The bank can just take your property in foreclosure and continue to hold the LLC and any personal guarantors liable for any deficiency amounts due.

I am sorry you are in this position, but legally you really have to deal with this through the LLC and this means you have to get an attorney locally to represent the LLC, because your partners actions are causing harm to the LLC and that is a potential breach of fiduciary duty.
Customer: replied 3 years ago.

The market value of the property is much higher than the loan amount. So, there shouldn't be any deficient amounts due to the bank.


 


My question was if the property forecloses, can we suggest potential buyers to the bank so that we can get our amounts that we invested back?


 


Since this is a fight between partners, how can we hire an attorney to represent the LLC? Looks like we may have to hire separate attorneys to represent us.

Thank you for your response.

If the properly forecloses, the bank sells it at an auction, so anyone can bid on it. Your buyers can contact the bank about buying it back, but that again is up to the bank. You would need to higher the attorney to represent the LLC itself against the partners who are not performing their duties to the LLC.
Customer: replied 3 years ago.

I have already had an initial consultation with a business law attorney.


 


In case we appeal to dissolve the LLC, how long would this take and how much would it cost?

Thank you for your response.

How much it will cost will depend on how much the other members want to litigate the matter. If they want to fight you on this then it could take over a year and could cost $5000 or more, there is no way to predict that time frame not knowing what the other party will do and if they will fight or will just allow the dissolution.
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