[WSBARP] LLC economic interest
Robert Pampell
rpampell at swcp.com
Wed Jan 25 18:32:13 PST 2023
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,
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