[WSBARP] LLC economic interest

[Roger Hawkes]

Thanks, Bob.

From: wsbarp-bounces at lists.wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com> On Behalf Of Robert Pampell
Sent: Wednesday, January 25, 2023 6:32 PM
To: 'WSBA Real Property Listserv' <wsbarp at lists.wsbarppt.com>
Subject: Re: [WSBARP] LLC economic interest

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: rpampell at swcp.com<mailto:rpampell at swcp.com>
http://www.linkedin.com/in/robertpampell
www.21stLawOffice.com<http://www.21stlawoffice.com/>




From: wsbarp-bounces at lists.wsbarppt.com<mailto:wsbarp-bounces at lists.wsbarppt.com> <wsbarp-bounces at lists.wsbarppt.com<mailto: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<mailto: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
www.maimonlaw.com<http://www.maimonlaw.com/>


[cid:image002.gif at 01D93158.D24412E0]

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/20230126/d3b8e900/attachment.html>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image001.gif
Type: image/gif
Size: 2310 bytes
Desc: image001.gif
URL: <http://mailman.fsr.com/pipermail/wsbarp/attachments/20230126/d3b8e900/image001.gif>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image002.gif
Type: image/gif
Size: 4868 bytes
Desc: image002.gif
URL: <http://mailman.fsr.com/pipermail/wsbarp/attachments/20230126/d3b8e900/image002.gif>