§ 3092 - Court action to determine fair value of distributional interest - Vermont Statutes

§ 3092. Court action to determine fair value of distributional interest

(a) In an action brought to determine the fair value of a distributional interest in a limited liability company, the court shall:

(1) determine the fair value of the interest, considering among other relevant evidence the going concern value of the company, any agreement among some or all of the members fixing the price or specifying a formula for determining value of distributional interests for any purpose, the recommendations of any appraiser appointed by the court and any legal constraints on the company's ability to purchase the interest;

(2) specify the terms of the purchase, including, if appropriate, terms for installment payments, subordination of the purchase obligation to the rights of the company's other creditors, security for a deferred purchase price and a covenant not to compete or other restriction on a dissociated member; and

(3) require the dissociated member or owner of the distributional interest to deliver an assignment of the interest to the purchaser upon receipt of the purchase price or the first installment of the purchase price.

(b) After an order to purchase is entered, a party may petition the court to modify the terms of the purchase and the court may do so if it finds that changes in the financial or legal ability of the limited liability company or other purchaser to complete the purchase justify a modification.

(c) After the dissociated member or owner of the distributional interest delivers the assignment, the person has no further claim against the company, its members, officers or managers, if any, other than a claim to any unpaid balance of the purchase price and a claim under any agreement with the company or the remaining members that is not terminated by the court.

(d) If the purchase is not completed in accordance with the specified terms, the limited liability company is to be dissolved upon application under subdivision (5)(D) of section 3101 of this title. If a limited liability company is so dissolved, the dissociated member or owner of the distributional interest has the same rights and priorities in the company's assets as if the sale had not been ordered.

(e) If the court finds that a party to the proceeding acted arbitrarily, vexatiously or not in good faith, it may award one or more other parties their reasonable expenses, including attorney's fees and the expenses of appraisers or other experts, incurred in the proceeding. The finding may be based on the company's failure to comply with subsection (b) of section 3091 of this title.

(f) Interest shall accrue and be paid on the amount awarded from the date determined under subsection (a) of section 3091 of this title to the date of payment. (Added 1995, No. 179 (Adj. Sess.), § 4.)