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Irwin Law
Irwin Law, Attorney
Category: Business Law
Satisfied Customers: 7161
Experience:  30+ yrs. representing small business, real estate, probate
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I am in a 50/50 partnership in North Carolina that is an

Customer Question

I am in a 50/50 partnership in North Carolina that is an LLC. We have been through mediation, a valuation of the company has been done by an outside professional court and there is a deadlock where the agreement to purchase my partners 50% will not be reached. If I put forth a action to sue for dissolution, will the courts allow my partner the option of buying my 50%?
JA: Can you tell me what state the LLC is registered in?
Customer: NC
JA: Has anything been officially filed? If so, what?
Customer: no
JA: Anything else you want the lawyer to know before I connect you?
Customer: no
Submitted: 5 months ago.
Category: Business Law
Expert:  Irwin Law replied 5 months ago.

It's possible that the court would order the business to be liquidated and the proceeds split equally. That would give both of you the option to buy the other partner out. Sometimes the way this is done is to give the other party a binding offer to sell or to buy at a specific price, but that only works if both parties are willing to sell their interest.

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Customer: replied 5 months ago.
I meant to say a valuation has been done by an outside professional company which was agreed upon by both parties. The valuation was for 1.4 million with each 50% member's value being $700,000. My partner has expressed through her lawyer that she would like 1.75 million. This has stalled the resolution outside of going to a judicial dissolution. I do not want to sue for dissolution if it would unable my partner to purchase my share of the company through court order.
Customer: replied 5 months ago.
I have been running the company for the last year and my partner has not been active at all. What options do I have besides dissolution if their is no operating agreement.
Customer: replied 5 months ago.
IF we went to Judicial dissolution and I did not want to sell my 50% and she did not want to sell her 50% at fair market value, then would the court wind down the company and sell it to another person? I that the only option through judicual dissolution or do any facts come into play like the fact the she refuses to work but still writes checks out of the business.
Customer: replied 5 months ago.
What facts could matter through judicial dissolution if I have been operating the company and she refuses to participate? Will the court take into consideration any arguements that are creating an unfair situation within the LLC because of her actions?
Customer: replied 5 months ago.
Could they rule that she must sell to me?
Expert:  Irwin Law replied 5 months ago.

You posted these additional questions in a separate question which I have responded to. Basically, if you cannot prevail uoon her to share the work load, or accept an unequal distribution of profits the LLC is deadlocked and cannot continue to operate. See: http://www.ncbusinesslitigationreport.com/2014/11/articles/professional-responsibility-1/eighty-five-thousand-reasons-not-to-represent-an-llc-without-the-approval-of-a-majority-of-the-members-and-one-other-thing/

I hope that I have provided excellent service and, if so, would love a 5 star rating. If not, please let me know how I can further assist you. There is no additional charge to you for rating me. A bonus is not required, but is always appreciated.

Customer: replied 5 months ago.
Could I bring a derivative action against her?
Expert:  Irwin Law replied 5 months ago.

NC has a ststute for that purpose. As they say, if the shoe fits.... http://www.ncga.state.nc.us/EnactedLegislation/Statutes/PDF/ByArticle/Chapter_57D/Article_8.pdf

Customer: replied 5 months ago.
I am not sure if I completely understand what I am reading in regards ***** ***** derivative claim. Can only a majority of members bring a derivative claim? Can a 50% owner that does not have a majority bring a derivative claim?
Expert:  Irwin Law replied 5 months ago.

Derivatives are usually brought by minority owners. The derivative is designed to force the LLC , not another member, to do something though, and that is not what you are trying to do. I think you should turn this over to a NC corporation lawyer at this point.

Customer: replied 5 months ago.
I have a lawyer and she has a lawyer also. The lawyers have been negotiating this since failed mediation. Could she force the LLC to put a claim against me - say if I opened up a competing business? or could I force the LLC to put a derivative suit against her for similar charges? She is current representing on her email signatures and social media and linkedin page that she is working for another company in our type industry.
Expert:  Irwin Law replied 5 months ago.

She is current representing on her email signatures and social media and linkedin page that she is working for another company in our type industry.

What is your attorney saying about that? If you can[t do something to her, then she can't do it to you either. What's good for the goose… That's why you're deadlocked. The reason she won't agree to a buyout is probably because she knows you will require a noncompete clause. She would too, and that's why she set her price so high. At least that's what it seems like to me. Since you already have an attorney, I can't add much more to this, and would appreciate your rating at this point.

Expert:  Irwin Law replied 5 months ago.

Hello again. I hope that I have provided excellent service and, if so, would love a 5 star rating. If not, please let me know how I can further assist you. There is no additional charge to you for rating me. A bonus is not required, but is always appreciated.

Thanks again for using JUST ANSWER.

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