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Roger, Attorney
Category: Legal
Satisfied Customers: 26333
Experience:  Litigation Attorney
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I am one of 3 partners in an LLC in NJ. We have an estranged

Customer Question

I am one of 3 partners in an LLC in NJ. We have an estranged partner who wrote a letter to our insurance company forbidding them from disbursing a sizable settlement check. The insurance company disbursed it to our attorney agent who gave it an attorney that my other partner and I hired to help deal with the estranged partner. The LLC was the insured. The settlement was issued to recoup the loss of inventory from an accident. The operating plan calls for a majority vote on any issues and prohibits any member from acting against the company. The estranged partner is in the minority. The lawyer is holding the money in his trust and says that he won't release it until we get a court order because he is afraid she'll sue him. He can't estimate what it may cost to get a court order, "It could be $20,000.00 - $150,000.00 or more" for his services. We've written a letter to him demanding that he disburse the funds immediately. The lack of funds is threatening our business's survival. I put in a call to the NJ bar grievance number but they have not called back in two days.
Submitted: 1 year ago.
Category: Legal
Expert:  Roger replied 1 year ago.
Hi - my name is XXXXX XXXXX I'm a litigation attorney. Thanks for your question. I'll be glad to assist you with this issue, which is a complicated one.

What the attorney holding the money SHOULD do is file an interpleader lawsuit, and turn the money over to the court clerk - - and the clerk will hold the money until a court decides how to disburse it. Basically, the attorney would inform the court that there is a disagreement between the members of the LLC and that the money is being turned over to the court clerk until the judge orders how to disburse the funds. That gets the lawyer out of the predicament, and gives the members of the LLC to make their cases for the money.

IF your bylaws state that majority rules, then you should be able to successfully recover the money via court order. This can happen fairly quickly if the interpleader is filed and an emergency hearing is requested by the parties, etc. Thus, you can act fast on this.

Also, the bar is not going to force him to turn the money over. You can file a complaint against the attorney, but that's not going to do anything to force him to act. However, the interpleader will get the money and the parties before the court fairly quickly.
Roger, Attorney
Category: Legal
Satisfied Customers: 26333
Experience: Litigation Attorney
Roger and 15 other Legal Specialists are ready to help you
Expert:  Roger replied 1 year ago.
I hope the above response answers your questions, but if you need anything further, please don't hesitate to ask.

Customer: replied 1 year ago.

Thank you. How long do you think this will take? Also, this attorney is charging us $10,000.00 for what he's done so far (basically researched LLC dissolution and typed up a complaint and certifications for an order to show cause that he kept promising to file but never did. How much time should I expect him to charge me for this service? Do you think we should seek a new attorney?

Expert:  Roger replied 1 year ago.
The interpleader could be filed within a few days. The resolution of an issue like this depends on the court's docket, but if you request an emergency hearing, you should be able to get some relief pretty fast.

As for the attorney's fee, $10,000 certainly would be unreasonable for what was done. Hopefully, the lawyer is charging by the hour and has only used a small portion of the funds. If you disagree with what he charges, you can discuss that.

As for seeking a new attorney, that may depend on whether he's willing to try and get the money to the court and disbursed as you wish. If he refuses the interpleader option, then it would likely be a good idea to discuss this with another lawyer as he may have a conflict of interest.

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