Inevitably, members of an LLC generally run into some kind of disagreement between one another. Many times, differences can be resolved without litigation and cooler heads often prevail. Unfortunately, that is not always the case, and watching a company that you have worked so hard for and invested your time and money into being mismanaged or run into the ground by other members can be heartbreaking. This is often even more frustrating for members holding minority interests, as they often feel that they have no choice but to watch their investment squandered.

When it becomes clear that disagreements between members cannot be resolved, litigation may be your only hope to protect your investment. Lawsuits over disagreements between fellow LLC members are an incredibly complex process with far more than meets the eye to consider. One common misconception is that LLC members in North Carolina owe one another fiduciary duties. This is generally not the case. Another common misconception is that one LLC member may recover damages against another LLC member by way of a traditional lawsuit. In many cases, this is not possible, as the claims you wish to bring and damages suffered, actually belong to the company itself. For these reasons, it is likely necessary that any claims are brought derivatively on behalf of the company. A derivative claim comes with a unique set of hurdles, including a requirement that specific prerequisite demands be made on the company to remedy any alleged wrongdoing.

In many ways, an LLC is however a creature of Contract, and it is not impossible to succeed directly against other members for the breach of a specific contractual duty they owed directly to you. Further, if it has become completely impossible to protect your interests, you may be able to successfully move the court to dissolve the LLC, which would cause the assets to be liquidated and distributed first to creditors and then to the members based on their respective membership interests. Additionally, frustration of your reasonable expectations in a closely-held organization may entitle you to relief. 

If disputes with your fellow LLC members have gone from bad to worse, the time is now to contract an experienced North Carolina Business Attorney. These are incredibly complex matters when they reach the point that litigation is necessary. A North Carolina Business Attorney can assist you in this process and also has the experience to help you negotiate a favorable resolution without the expense of litigation in many cases. Contact The Law Office of W. Randall Holcomb, PLLC to schedule a consultation today.