2022 -- H 6628

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LC003542

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2022

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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: January 06, 2022

     Referred To: House Corporations

     It is enacted by the General Assembly as follows:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

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

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

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

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

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

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

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

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

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

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

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the units to the purchaser.

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     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

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

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     This act would take effect upon passage.

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