QUESTION
Is there a conflct of interest from our partner, who happens to own a minority interest in our LLC? What can we do?
Asked on Dec 05th, 2011 on Business Law - Oklahoma
More details to this question:
ORIGINAL LLC owned 100% by two members, AAA, LLC and JOHN, an individual. ORIGINAL LLC added two additional members, LAWYER, LLC as a minority interest 10% and OTHER, LLC 10%. LAWYER LLC asked to completed the changes to the Operating Agreement and add the new members. LAWYER LLC memorized this action inside of the Operating Agreement. In addition to updating the members, LAWYER LLC made changes to protect the minority interest holders and removed Arbitration requirements included in the original Operating Agreement. LAWYER, LLC also requested a change to the voting requirements to "one member = one vote" only his minority ownership, until ORIGINAL LLC questioned why OTHER, LLC would not have the same rights. AAA, LLC and JOHN were under the assumption LAWYER LLC was contributing his services as capital to the company. It appears LAWYER LLC is protecting his own interest versus the collective interest of the ORIGINAL LLC. NO CONFLICT CONSENTS SIGNED BY ANY PARTY.
1 ANSWER
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1 Award
It is unclear whether the operating agreement that adds "lawyer" as a member has already been executed. If so, then you may be deemed to have waived in writing the conflicts to which you refer, especially if the changes to protect minority members were demanded by the other new member.
Answered on Dec 06th, 2011 at 2:18 PM