[WSBARP] LLC economic interest

[Robert Pampell]

The holder of an economic interest (AKA 'transferable interest', FKA
'assignee') is only entitled to distributions if, as, and when made, to the
extent that the transferor would be so entitled (RCW 25.15.251(2)).  If no
other provision is made, distributions must be pro rata, according to the
'agreed value' of the members' contributions (RCW 25.15.206).  If the LLC is
going to be dissolved and liquidated following the sale of the principal
asset, the economic interest holder probably is entitled to distribution of
the net proceeds to be distributed; RCW 25.15.305(1)(b) refers to members
and "former members".

 

It is important to know whether the LLC is member- or manager-managed.   If
the latter, then the manager has discretion (up to a point) as to the timing
and character (i.e. operating income vs. proceeds of a sale of assets) of
distributions.  All of these things can be modified by the operating
agreement if there is one.  The Act does not distinguish between
distributions of income vs. sale proceeds, only distributions of money vs
in-kind.

 

I have not had occasion to research any caselaw construing these provisions
of the Act.

 

Bob Pampell

 

Robert Pampell, Attorney

21st Century Law Office, PLLC

19125 Northcreek Parkway, Suite 120

Bothell, WA 98011

voice: 425-329-2629
fax: 877-640-6403
cell: 425-501-4784
email:  <mailto:rpampell at swcp.com> rpampell at swcp.com

 <http://www.linkedin.com/in/robertpampell>
http://www.linkedin.com/in/robertpampell

 <http://www.21stlawoffice.com/> www.21stLawOffice.com

 

 

 

 

From: wsbarp-bounces at lists.wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com>
On Behalf Of Ralph Maimon
Sent: Wednesday, January 25, 2023 11:44 AM
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com>
Subject: [WSBARP] LLC economic interest

 

Is anyone aware of any law or precedent that allows an economic interest
member of an LLC to receive the proceeds of the income producing property
itself on its sale or is he/she restricted to the regular income?. 

 

Ralph Maimon

 

Law Office of Ralph Maimon, P.S.

2811 E. Madison Street, Suite 202

Seattle, WA 98112

(206) 323-0911

Fax: (206)462-1505

 <http://www.maimonlaw.com/> www.maimonlaw.com 

 

 



 

This email is confidential. If you have received it in error,

please notify me and delete it from your device 

without reading.  Thank you.  

 

-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://mailman.fsr.com/pipermail/wsbarp/attachments/20230125/fc4df19e/attachment.html>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image003.gif
Type: image/gif
Size: 2310 bytes
Desc: not available
URL: <http://mailman.fsr.com/pipermail/wsbarp/attachments/20230125/fc4df19e/image003.gif>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image004.gif
Type: image/gif
Size: 4868 bytes
Desc: not available
URL: <http://mailman.fsr.com/pipermail/wsbarp/attachments/20230125/fc4df19e/image004.gif>