Friday, November 22, 2013

Lieberman v. Wyoming.com LLC case brief

Lieberman v. Wyoming.com LLC case brief summary
82 P.3d 274 (2004)


CASE SYNOPSIS
Defendant former member (member) filed notice of his withdrawal as a member of plaintiff limited liability company (LLC). The LLC sued for a declaratory judgment regarding the withdrawal's financial consequences. After a highest court's remand, the Fremont County, Wyoming, District Court, by summary judgment, ordered liquidation of the member's equity interest at its capital account value as of the date of withdrawal. The member appealed.

DISCUSSION

  • The highest court previously held that, under the Wyoming Limited Liability Company Act,Wyo. Stat. Ann. §17-15-101 et seq., the member was entitled to the return of his capital contribution (ROCC), regardless of his status as a member of the LLC, and remanded the case for a declaration of the member's and LLC's other rights with respect to each other. 
  • The member's capital account being negative (and being used by the trial court as the "value" for his ROCC, compared to evidence of its having fair market value) prompted the member's appeal. 
  • The member (similar to a member's assignee who did not receive approval to be a member, and as the members did not contract for a required buyout) could, and did, retain an equity interest in the LLC without also being a member. 
  • Neither party could (and the highest court could not and would not) force a buyout. The highest court did not make: 
  • (1) partnership and corporation law analogies; and 
  • (2) a buyout contract for the parties. 
  • Consistent with declaratory judgment preventive justice purposes to settle and to afford relief from legal relation uncertainty and insecurity, the trial court was to define the remainder of the parties' rights.
CONCLUSION
The highest court reversed the summary judgment and remanded the case to the trial court for the trial court to ascertain and to establish the remainder of the parties' legal relations to govern their future conduct.


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