QUESTION
I am a 25% member of an LLC in Iowa. There is one other member, and he is 75% owner, I believe that he has been taking more money than he deserves.
Asked on Sep 23rd, 2012 on Business Law - Iowa
More details to this question:
We have had the operating agreement since 1993, and the whole time I have been the manager, while he handles all of the business aspects of the company. By doing taxes, etc. Basically handling all of the money. In the agreement, he is to show me financial statements, and I have never seen these. I believe that he has taken a lot of money over the years, and I am starting to want to take action. In the past, he has threatened to sell his share. Do I have first choice at his share? Does he have to offer his portion to me first? I am salaried in the LLC and under the operating agreement it says that the profits are supposed to be divided up at the end of the year 75/25%. Is it unusual that I am salaried. Do I have any room to sue? If so, should I get a lawyer? And what should I do? Thank You.
1 ANSWER
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You have not alleged any facts setting forth a violation of the operating agreement. A court is not going to substitute its view of what is "fair" for what you agreed upon. You can compel your co-member to provide the financial information promised. If that shows him to have received more than his contractual share, a court can order restitution.
Answered on Sep 29th, 2012 at 10:47 PM