LLC partners stealing money, what recourse do I have?

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4 MBR LLC for rental property. Mbr agreed we need to dissolve LLC and sell property. Now 2 Mbrs are having tenant pay them Direct keeping other 2 mbrs portion. Won’t respond to sell home. They are holding us hostage as mbrs. What can we do?

Attorney Answers

2
Brandon Robinson ·
Assuming that the property is titled in the name of the LLC, you have both a corporate legal issue and a real estate issue. If there are fundamental disagreements among the members on the dissolution question, those in favor of dissolution need to consult with a business litigator to explore either private resolutions (such as a buyout of the dissatisfied members, or compromises and member resolutions related to the company's use and disposition of the property), or a lawsuit to compel judicial dissolution of the LLC. If dissolution is to take place--either by unanimous consent of members or by judicial decree--the members would need to sell the real estate in order to liquidate the company's assets during the "winding up" phase that follows a company's dissolution, and then pay residual proceeds and distribute residual assets to the members according to their ownership percentages, following satisfaction of all outstanding company creditors, debts, claims and other obligations. A local lawyer who regularly advises real estate holding LLCs can offer you tailored advice to handle corporate and real estate-related issues. Best wishes in this situation.
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Phillip Gunthert ·
You will need to get a local real estate attorney and pursue a forced partition action most likely. It would be best to work something out on your own without having to resort to a partition but it does not appear that option would work very easily based upon what you have posted.
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