LLC - right of first refusal in operating agreement and BK
Posted: Mon Nov 09, 2015 11:16 am
In an LLC operating agreement there is a provision that says that if a
member goes BK, the other members have the right to buy out his interest at
a predetermined price (like some multiple of company's earnings). Are ROFR
provisions enforceable in a BK court or would the court look at the
agreement as an "executory contract" and, basically, allow the DIP/T'ee to
remain in possession as an economic interest holder (but not a "full"
voting member)?
This is in NDCA.
Holly Roark
Certified Bankruptcy Specialist*
*and Sports Lawyer*
holly@roarklawoffices.com **primary email address**
www.roarklawoffices.com
*Central District of California & District of Idaho* - Consumer Bankruptcy
Attorney
1875 Century Park East, Suite 600 Los Angeles, CA 90067
T (310) 553-2600; F (310) 553-2601
*By State Bar of California Board of Legal Specialization
In an LLC operating agreement there is a provision that says that if a member goes BK, the other members have the right to buy out his interest at a predetermined price (like some multiple of company's earnings). Are ROFR provisions enforceable in a BK court or would the court look at the agreement as an "executory contract" and, basically, allow the DIP/T'ee to remain in possession as an economic interest holder (but not a "full" voting member)? This is in NDCA.Holly RoarkCertified Bankruptcy Specialist*and Sports Lawyer
holly@roarklawoffices.com**primary email address**
www.roarklawoffices.com
Central District of California & District of Idaho - Consumer Bankruptcy Attorney
1875 Century Park East, Suite 600 Los Angeles, CA 90067T (310) 553-2600; F (310) 553-2601
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