1997 Minnesota Statutes

     322B.873 Disposition of assets upon dissolution. 

    Subdivision 1.    Disposition upon liquidation.  Subject 
 to subdivision 4, except when the business of a dissolved 
 limited liability company is being continued under subdivision 2 
 or when the dissolved limited liability company is being wound 
 up and terminated under section 322B.81, subdivision 3, the 
 assets of the dissolved limited liability company must be 
 disposed of to satisfying liabilities according to the following 
 priorities:  

    (1) to creditors, including members who are creditors, to 
 the extent otherwise permitted by law, in satisfaction of 
 liabilities of the limited liability company other than 
 liabilities for interim distributions to members under section 
 322B.51 or termination distributions under section 322B.50; 

    (2) unless otherwise provided in the articles of 
 organization, to members and former members of the limited 
 liability company in satisfaction of liabilities for 
 distributions under section 322B.50 or 322B.51; and 

    (3) unless otherwise provided in the articles of 
 organization, to members first for a return of their 
 contributions, as restated from time to time under section 
 322B.41, and secondly respecting their membership interests in 
 the proportions in which the members share in distributions. 

    Subd. 2.    Disposition under a business continuation 
 agreement.  If a business continuation agreement exists, then 
 after dissolution the board of governors shall resolve to 
 implement the business continuation agreement and the assets of 
 the dissolved limited liability company shall be disposed of 
 according to that agreement, except:  

    (1) members and former members shall have dissenters' 
 rights as provided in sections 322B.383 and 322B.386, but:  

    (i) no dissenters' rights shall exist if the business of 
 the dissolved limited liability company is being continued 
 pursuant to a business continuation agreement made after the 
 dissolution, and 

    (ii) any dissenters' rights that do exist are limited by 
 subdivisions 3 and 4; and 

    (2) if the business of the dissolved limited liability 
 company is being continued, but not through a merger under 
 section 322B.81, subdivision 3, the dissolved limited liability 
 company shall comply with either section 322B.816 or 322B.82.  

    Subd. 3.    Limitations on dissenters' rights.  If a 
 person has agreed in a business continuation agreement to waive 
 dissenters' rights and nonetheless asserts dissenters' rights 
 under subdivision 2:  

    (1) those rights must be honored; but 

    (2) unless the business continuation agreement provides 
 otherwise, including providing for installment payments: 

    (i) in determining the fair value of the membership 
 interest, the value of the good will of the business of the 
 dissolved limited liability company must not be considered; and 

    (ii) the payment due the dissenter is subject to an offset 
 equal to:  

    (A) any amount owed to the limited liability company by the 
 member; 

    (B) the amount of damages, if any, suffered by the limited 
 liability company as a result of the dissenter's breach of the 
 business continuation agreement; and 

    (C) the amount of other damages, if any, provided for in 
 subdivision 4.  

    Subd. 4.    Damages and offsets for wrongful dissociation 
 and breach of a member control agreement.  A member who 
 wrongfully resigns or retires is liable to the limited liability 
 company for any damages caused by the member's wrongful 
 resignation or retirement.  Any member who breaches a member 
 control agreement is liable to the limited liability company for 
 any damages caused by the breach.  Any payment due a member 
 under this section, including payments to dissenters due to 
 winding up merger under section 322B.81, subdivision 3, is 
 subject to offset these damages. 

    HIST: 1992 c 517 art 2 s 126; 1993 c 137 s 48