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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Business Law
Satisfied Customers: 118087
Experience:  All corporate law, including non-profits and charitable fraternal organizations.
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In Wa.State, how safe is my interest in an LLC I dont trust

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In Wa.State, how safe is my interest in an LLC? I don't trust the other 2 members, one of whom is manager (It's impossible to vote him out unless he votes himself out) and the other is another sibling in his control). The LLC is a partner in a Partnership,(P),where that same manager,(X) is co-manager with another untrustworthy person (Y) who is manager of another LLC( also a partner & includes Y's sibs). Because of control of % of interest via LLC's, X & Y weild near complete control in 'P' & act in unison for their own agenda.(I own 8.5%direct in P from dissolution of Dad's trust when Mom passed.) X is also executor of Mom's estate of which I am a beneficiary. X (my bro) & other sib want to buy me out of all my bus interest with their % in Mom's house cause Im not in a position to sign guarantee on needed bus loan but they've misrepresented & stonewalled info pertinent to value. I would like to counter w/keep 1 or 2 % of a direct Partnership interest I own (8.5%) or a few % of my LLC interest as a hedge against their cheating me &would prefer to keep LLC%. Will I be sitting duck for being cheated in that case or do I have to keep a % of direct interest which exposes me to liability? I'm poor. X & Y are brazen in contempt for ethics/fiduciary law cause I have no $ to litigate & they taunt
You have a right to your share of the proceeds from the business, but your security is only as good as the trustworthiness of the other members and of the controlling member. Thus, as a member if you believe that the other members are breaching their fiduciary duty to you, your options are limited to taking the buyout or suing the other members for breach of fiduciary duty to you. As far as making a decision on taking the buyout, you have to weigh what they are offering against the cost to you to litigate their breach of fiduciary duty and what you can gain from that litigation.

As a member of the LLC you have a legal right to inspect all of the LLC and partnership records and financial accounts and you should do so to assist you in making your decision.

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Customer: replied 6 years ago.
I'm confused. I will consider taking an offer but they may push me into court if I don't take what they think I should take and the value of the house is questionable because it's on pilings but its waterfron.. the garage is ready to fall in the water. It They have lied about how much $ they took out of Mom's estate to pay for an extension on the business loan they will benefit from.. that one lie alone is worth over 300K. I was going to ask the judge, based upon the fact they lied in a big way that will affect value of estate and they've been passing $ from estate to partnership and from LLC to estate, that I want to retain, in addition to cash plus the house, a small percent. You say I have a right to inspect books.. Can I do that with my LLC interest or must I retain a piece of my direct interest in Partnership.. They may not have enough cash to pay the value diff.
If the LLC is a part of the partnership, then you can inspect the books with your LLC membership, but if not you would need to remain in the partnership to review the books. I wish I could give you more detail, but because we cannot see all of the documents involved with your case there is no way to better advise you and it may come down to you getting a local lawyer to represent your interests.
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