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I am part owner of 3 LLCs in Mississippi and 1 Inc. I share

I am part owner of...
I am part owner of 3 LLC's in Mississippi and 1 Inc. I share ownership with one of the members who was also my employer. Now that I have separated my employment, the member who was my employer is now trying to form new companies performing identical services and move contracts from the existing company with a majority of votes. Each company is paying regular dividends. Do I have a chance here? Or will I spend more money trying to prove I'm right?
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Answered in 5 minutes by:
6/1/2011
Loren
Loren, Attorney
Category: Legal
Satisfied Customers: 34,942
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You would need to look to the operating agreement of the LLC you and the employer owned. As a general rule, members are free to engage in whatever businesses they want. If, however, the member had management duties within the LLC then he could be in violation of the fiduciary duty of loyalty he owes to your LLC.

Before making a decision as to whether it is worth pursuing, you will want to sit down with local counsel and review the operating agreement in detail to see if there is a basis for liability.
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Customer reply replied 6 years ago
I've read the operating agreements and there is little explaining the recourse for such an act.

I may need to clarify. The member will be removing contracts from the existing entity forming a new entity with same members minus me and transferring contracts to new entity. The new entities are being created. Would tortious interference be a possibility?
Absolutely. You can file a multi count complaint using his various capacities within the LLC. There could be tortious interference of both contracts and business relationships and violation of fiduciary duties. You can petition the court for a restraining order to stop him from inducing the customers to leave your LLC.


  Tortious interference with contract occurs when one causes another to breach a contract with a third person.  Par Industries, Inc. v. Target Container Co., 708 So.2d 44, 48(¶ 8) (Miss.1998).   Tortious interference with business relations, on the other hand, occurs when one unlawfully diverts prospective customers away from another's business.  Id. at (¶ 10).   With both torts, the plaintiff must prove (1) the offending acts were intentional and willful, (2) the acts were calculated to cause damage to the plaintiffs in their lawful business, (3) the acts were done with the unlawful purpose of causing damage and loss, without right or justifiable cause on the part of the defendant (which constitutes malice), and (4) actual damage and loss resulted.  Scruggs, Millette, Bozeman & Dent, P.A. v. Merkel & Cocke, P.A., 910 So.2d 1093, 1098(¶ 23) (Miss.2005);  MBF Corp. v. Century Business Communications, Inc., 663 So.2d 595, 598 (Miss.1995).   Additionally, in the case of tortious interference with business relations, in order to establish a prima facie case for damages, the plaintiff must prove (1) that his business experienced a loss, and (2) that the defendant was the cause of that loss.  Par Industries, 708 So.2d 44 at 48(¶ 10).
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