Dissolving a Limited Liability Company

If members of a Limited Liability Company (“LLC”) want to dissolve an LLC, there are steps to be taken top formally dissolve it.

First, review your operating agreement sand determine what steps need to be taken to formally, and properly dissolve the LLC. An operating agreement sets out the rules for LLCs when they dissolve or when an LLC member chooses to move on. Your operating Agreement might have pertinent information for this process. If not, you might consider making one before dissolving in earnest.  

If the LLC has employees, notify them if necessary, and make sure all payroll taxes are current, or if any other obligations pertaining to the employees are current.

If the LLC has real estate holdings or other assets, a decision must be made to liquidating these assets.  Ask yourselves questions like: Is your real estate liquid? Can you realistically sell your property? If not now, when? If you cannot sell it, what does that mean for the dissolution of the LLC? If you sell it at a loss, how does that affect the basis for your LLC members? What are the terms of leases you have and what is required if you vacate the property?

If the LLC has entered in any contracts with customers, you’ll need to come up with a plan for how to fulfill those contracts. What will it cost if you can’t fulfill them?

Work with your tax expert to anticipate what you will owe in taxes and make sure you have enough money to cover any final amount due. You’ll need to file the appropriate form with the IRS at the right time, usually within a specified number of days of your dissolution date.

When you have the answers to these questions, along with other specifics pertaining to your particular LLC, you will be ready to present the data to the members. 

What’s Next,

Typically, a dissolution procedure is outlined in your operating agreement or other formal organizational documents. Usually, it requires a vote by your members or shareholders. The dissolution procedure will probably also specify how the assets are to be distributed. In an LLC, assets are generally divided on a pro-rata basis, but your operating agreement may call for some other distribution method. If no procedure is specified by your LLC documents, then consult your Secretary of State or the corporation’s division of your state, who can provide you specific guidance based on state regulations.

The effective date of the dissolution is important, and the selection of the date may be based on constraints such as when you can liquidate assets. You may want to find a lawyer to help you analyze the factors outlined above, among others, and present the best options to the members. Remember that the vote may not be instantaneous or unanimous. If losses are involved, members may have differing opinions and demand more information. Getting a final vote can be a slow process.

Once the members or shareholders have voted, record the results in your formal meeting minutes.

One of the most important steps in dissolving an LLC is to properly notify your creditors. This is a formality and must be done in writing in order to limit your liability to them.

Finally,

Finally, when dissolving an LLC, file the proper paperwork with the Secretary of State or corporation’s division of your state. It’s usually not complex, but it’s a formality that you must attend to, and the effective date on the paperwork may provide a defense against debt or liability.

This article contains general legal information and does not contain legal advice, and it’s not intended to create an attorney-client relationship. ResIpsaLAw.com is not a law firm or a substitute for an attorney or law firm, and ResIpsaLaw.com is not a lawyer referral service. The law is complex and changes often. For legal advice, please consult with a licensed attorney in your jurisdiction.

Ninth U.S. Circuit Court of Appeals affirmed the dismissal of porn star Stephanie Clifford, aka Stormy Daniels’s defamation action against President Donald Trump.

The Ninth Circuit Court held that President Donald Trump’s tweet accusing her of a “con job” was merely constitutionally protected “rhetorical hyperbole.”

The decision signed by Chief Judge Sidney Thomas and Judge Kim Wardlaw, upheld an order by District Court Judge S. James Otero of the Central District of California granting Trump’s special motion to strike.

According to Stephanie Clifford, she had an affair with Trump in 2006; and in 2011, she agreed to provide information about her affair with President Donald Trump to Touch Magazine. According to her, a few weeks after her agreement with Touch Magazine, a man came up to her in a Las Vegas parking lot, made a threat against her daughter, and admonished Clifford:

“Leave Trump alone. Forget the story.”

A police sketch artist, with the help of Clifford, produced a likeness of the man who had purportedly threatened her, and on April 17, 2018, she released the rendering.

Trump followed with a tweet:

“A sketch years later about a nonexistent man. A total con job, playing the Fake News Media for Fools (but they know it)!”

Trump’s tweet contained a graphic disseminated by Twitter user “Deplorably Scottish” which contained the sketch of the man in the parking lot next to a photo of Clifford with her ex-husband, Glendon Carter. There was a resemblance of the man to her former spouse.

President Donald Trump’s April 18, 2018 tweet.
The Ninth U.S. Circuit Court held that the president’s comments were not actionable.

Sketch Artist

The Court held that the president’s tweet is not susceptible of a defamatory meaning. It explains:

“[C]iting the Black’s Law Dictionary definition of ‘confidence man.’ she argues that the use of the term ‘con job’ implied that she had literally committed the crime of fraud. But it would be clear to a reasonable reader that the tweet was not accusing Clifford of actually committing criminal activity….Instead, as used in this context, the term ‘con job’ could not be interpreted as anything more than a colorful expression of rhetorical hyperbole….Because the tweet could not reasonably be read as asserting that Ms. Clifford committed a crime, this theory of defamation is not viable.”

Clifford also asserted that the tweet implied she had lied about having been threatened.

“We agree that this is a reasonable interpretation of the tweet, but conclude that it is not actionable,” the opinion says, elaborating:

“Viewed through the eyes of an objectively reasonable reader, the tweet here reflects Mr. Trump’s opinion about the implications of the allegedly similar appearances of Ms. Clifford’s ex-husband and the man in the sketch. Mr. Trump’s reference to a ‘sketch years later of a nonexistent man’ signals that the allegedly defamatory conclusion that followed—that Ms. Clifford was pulling a ‘con job’ and ‘playing the Fake News Media for Fools’—plainly concerns the similarities between the sketch and the photograph of Ms. Clifford’s ex-husband. Because the tweet juxtaposing the two images was displayed immediately below Mr. Trump’s tweet, the reader was provided with the information underlying the allegedly defamatory statement and was free to draw his or her own conclusions. Moreover, the tweet does not imply any undisclosed facts. Accordingly, the tweet, read in context, was a non-actionable statement of opinion.”

As to her claim that the tweet implies she is lying about having had an affair with Trump, the Court held:

“[W]e do not believe the tweet could be reasonably read as addressing Ms. Clifford’s account of her relationship with Mr. Trump. The tweet did not reference the alleged relationship and instead focused on the sketch of the ostensibly ‘nonexistent man.’ This was plainly a reference to Ms. Clifford’s account of having been threatened by a man in a Las Vegas parking lot. It follows that the statement in the following sentence that Ms. Clifford was pulling a ‘con job’ and ‘playing the Fake News Media for Fools’ was referring to statements by Ms. Clifford about the alleged relationship.”

Clifford received $130,000 prior to the 2016 election for signing a nondisclosure agreement concerning the purported affair.

 “Ms. Clifford has directed us to proceed to seek further review by the 9th Circuit, en banc. If that effort fails we will likely seek review by the Supreme Court.

Attorney Portal in Los Angeles Superior Court Expands to Small Claims Court, Collections, and Unlawful Detainer

Commencing August 3, 2020, Attorneys and individuals can schedule Audio or Video court appearances for hearings commencing on August 10, 2020, and thereon.

Remote appearances can be scheduled for up to 2 hours in advance of a hearing, using AttorneyPortal.com

 up until 2 hours before the scheduled start time of the hearing. This change is effective July 8, 2020; previously, scheduling was cut off at 8 hours before a hearing. 

You may schedule remote courtroom appearances for Unlawful Detainer and Collections cases in the following courthouses:

Michael D. Antonovich Antelope Valley, Chatsworth, Compton, Governor George Deukmejian (Long Beach), Inglewood, Stanley Mosk, Norwalk, Pasadena, Santa Monica, Van Nuys East, and West Covina.

You may also schedule remote appearances for Civil cases in these five Norwalk Departments:

SE-D; SE-E; SE-G; SE-H; and SE-R.

LACourtConnect provides the following benefits:

  • Promotes convenience and choice through cost-effective audio and video options;
  • Reduces the number of court visitors, which assists with social distancing protocols;
  • Eliminates driving and parking costs; and
  • Saves commute time to courthouses.