2021 -- H 5348

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LC000987

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2021

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A N   A C T

RELATING TO CORPORATIONS, ASSOCIATIONS, AND PARTNERSHIPS -- THE RHODE

ISLAND LIMITED-LIABILITY COMPANY ACT

     Introduced By: Representative Blake Anthony Filippi

     Date Introduced: February 05, 2021

     Referred To: House Corporations

     It is enacted by the General Assembly as follows:

     SECTION 1. Chapter 7-16 of the General Laws entitled "The Rhode Island Limited-

Liability Company Act" is hereby amended by adding thereto the following section:

     7-16-77. Avoidance of dissolution by unit buyout.

     Whenever a petition for dissolution of an LLC is filed by one or more members

(subsequently in this section referred to as the "petitioner") pursuant to § 7-1.2-1314 or a right to

compel dissolution which is authorized under § 7-1.2-1701 or is otherwise valid, one or more of its

other members may avoid the dissolution by filing with the court prior to the commencement of

the hearing, or, in the discretion of the court, at any time prior to a sale or other disposition of the

assets of the LLC, an election to purchase the units owned by the petitioner at a price equal to their

fair value. If the units are to be purchased by other members, notice must be sent to all members of

the LLC other than the petitioner, giving them an opportunity to join in the election to purchase the

units. If the parties are unable to reach an agreement as to the fair value of the units, the court shall,

upon the giving of a bond or other security sufficient to assure to the petitioner payment of the

value of the units, stay the proceeding and determine the value of the units, in accordance with the

procedure set forth in § 7-1.2-1202, as of the close of business on the day on which the petition for

dissolution was filed. Upon determining the fair value of the units, the court shall state in its order

directing that the units be purchased, the purchase price and the time within which the payment is

to be made, and may decree any other terms and conditions of sale that it determines to be

appropriate, including payment of the purchase price in installments extending over a period of

time, and, if the units are to be purchased by members, the allocation of units among members

electing to purchase them, which, so far as practicable, are to be proportional to the number of units

previously owned. The petitioner is entitled to interest, at the rate on judgments in civil actions, on

the purchase price of the units from the date of the filing of the election to purchase the units, and

all other rights of the petitioner as owner of the units terminate on that date. The costs of the

proceeding, which include reasonable compensation and expenses of appraisers but not fees and

expenses of counsel or of experts retained by a party, will be allocated between or among the parties

as the court determines. Upon full payment of the purchase price, under the terms and conditions

specified by the court, or at any other time that is ordered by the court, the petitioner shall transfer

the units to the purchaser.

     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO CORPORATIONS, ASSOCIATIONS, AND PARTNERSHIPS -- THE RHODE

ISLAND LIMITED-LIABILITY COMPANY ACT

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     This act would permit a member or members of a limited-liability company to avoid

dissolution by buying the units owned by the other member or members seeking dissolution.

     This act would take effect upon passage.

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LC000987

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