Title: LIEBERMAN v. WYOMING.COM LLC

State: wyoming

Issuer: Wyoming Supreme Court

Document:

LIEBERMAN v. WYOMING.COM LLC2000 WY 17711 P.3d 353Case Number: 99-97Decided: 09/21/2000Supreme Court of Wyoming

E. 
MICHAEL LIEBERMAN, Appellant (Defendant),

v.

WYOMING.COM LLC, a Wyoming Limited 
Liability Company, Appellee (Plaintiff).

                                  

 

Appeal from the District Court of Fremont 
County: The Honorable Nancy J. Guthrie, Judge

 

   
Representing Appellant:

 

   William D. Bagley of Bagley Law 
Office, Cheyenne, WY.  Argument by 
Mr. Bagley.

    
Representing Appellee:

 

   Alexander K. Davison of Patton 
& Davison, Cheyenne, WY.  
Argument by Mr. Davison.

 

   
Before LEHMAN, C.J., and THOMAS, MACY,* GOLDEN, and HILL, 
JJ.

  * 
Retired June 2, 2000.

 

 

   
LEHMAN, Chief Justice.

[¶1]         In this case, we review a summary 
judgment in favor of appellee Wyoming.com LLC, directing it to return only the 
capital contribution made by a withdrawing member of the LLC, appellant E. 
Michael Lieberman (Lieberman).  Although the district court correctly 
resolved the return of Lieberman's capital contribution, its order does not 
resolve the question of what became of the rest of Lieberman's interest in the 
company.  We affirm in part and 
reverse and remand for full resolution of the parties' 
dispute.

 

                                    
ISSUES

 

[¶2]         In his brief, Lieberman raises 
three issues:

 

Issue No. 1: Unless otherwise provided in the 
Articles or Operating Agreement, is a member withdrawing from a Wyoming Limited 
Liability Company entitled to demand and receive the fair market value of his 
share of the business as a going concern, if the Company elects to 
continue?

 

Issue No. 2: Absent agreement, is there authority for 
the withdrawing Member's contribution to be valued at less than the fair value 
of his equity in the Company?

 

Issue No. 3: Did the District Court err in granting 
Summary Judgment on disputed material issues of fact?

 

  [¶3]    Appellee, Wyoming.com LLC, 
presents this statement of the issues:

 

1.  
Whether a member who withdraws from a Wyoming limited liability company 
is entitled to demand and receive only the return of his contributions to 
capital when the limited liability company elects to continue, is in accord with 
Wyoming law?

 

2.  
Whether the trial court's grant of summary judgment in favor of appellee 
was proper.

 

                                    
FACTS

 

[¶4]         On September 30, 1994, Steven 
Mossbrook, Sandra Mossbrook, and Lieberman created Wyoming.com LLC by filing 
Articles of Organization with the Wyoming Secretary of State.  The initial capital contributions to 
Wyoming.com were valued at $50,000.1 Lieberman was vested with an 
initial capital contribution of $20,000, to consist of services rendered and to 
be rendered.2  According to the Articles of 
Organization, Lieberman's contribution represented a 40% ownership interest in 
the LLC. The Mossbrooks were vested with the remaining $30,000 capital 
contribution and 60% ownership interest.  
In August of 1995, the Articles of Organization of Wyoming.com were 
amended to reflect an increase in capitalization to $100,000.3  The increase in capitalization was the 
result of the addition of two members, each of whom was vested with a capital 
contribution of $25,000, representing a 2. 5% ownership interest for each new 
member.  Despite the increase in 
capitalization, Lieberman's ownership interest, as well as his stated capital 
contribution, remained the same.

 

[¶5]         On February 27, 1998, Lieberman 
was terminated as vice president of Wyoming.com and required to leave the 
business premises.  The other 
members of Wyoming.com met the same day and approved and ratified the 
termination.4  On March 13, 1998, Lieberman served 
Wyoming.com and its members with a document titled "Notice of Withdrawal of 
Member Upon Expulsion: Demand for Return of Contributions to Capit[a]l."  In addition to giving notice of his 
withdrawal from the company, Lieberman's notice demanded the immediate return of 
"his share of the current value of the company," estimating the value of his 
share at $400,000, "based on a recent 
offer from the Majority Shareholder."

 

[¶6]         In response to Lieberman's notice 
of withdrawal, the members of Wyoming.com held a special meeting on March 17, 
1998, and accepted Lieberman's withdrawal.  
The members also elected to continue, rather than dissolve, 
Wyoming.com.  Additionally, they 
approved the return of Lieberman's $20,000 capital contribution.  However, Lieberman refused to accept the 
$20,000 when it was offered.

 

[¶7]         Wyoming.com filed suit in June of 
1998 asking for a declaration of its rights against Lieberman.  Lieberman filed suit the same month 
requesting dissolution of Wyoming.com, and the actions were consolidated.  After a hearing on cross motions for 
summary judgment, the district court granted Wyoming.com's motion for summary 
judgment and denied Lieberman's motion for partial summary judgment.  The district court ruled that, because 
the remaining members of Wyoming.com LLC agreed to continue the business under a 
right to do so in the Articles of Organization, the company was not in a state 
of dissolution.  The district court 
further ruled that Lieberman had the right to demand return of only his stated 
capital contribution, $20,000, which the district court ordered to be paid in 
cash.  Lieberman 
appealed.

 

                              
STANDARD OF REVIEW

 

[¶8]         The district court resolved this 
case by the grant and denial of cross motions for summary judgment.  Generally, a denial of a motion for a 
summary judgment is not an appealable final order.  Wolter v. Equitable Resources Energy 
Co., Western Region, 979 P.2d 948, 953 (Wyo. 1999); Matter of Adoption of MSVW, 
965 P.2d 1158, 1161 (Wyo. 1998). However, there are exceptions to this 
rule.  One exception we have adopted 
is that, when the district court grants one party's motion for a summary 
judgment and denies the opposing party's motion for a summary judgment and the 
district court's decision completely resolves the case, both the grant and the 
denial of the motions for a summary judgment are subject to appeal.  Matter of Adoption of MSVW, 965 P.2d  at 
1162.

 

[¶9]         The parties in this case filed 
opposing motions for a summary judgment.  
Although Lieberman's motion was one for a partial summary judgment, the 
district court appears to have disposed of the entire case in a single order by 
denying Lieberman's motion and granting Wyoming.com's motion.  We will, therefore, afford review of the 
entire matter, including the denial of Lieberman's motion.  Matter of Adoption of MSVW, 965 P.2d  at 
1162.

 

[¶10]     Summary judgment is appropriate when 
there is no genuine issue as to any material fact and the moving party is 
entitled to judgment as a matter of law.  
W.R.C.P. 56(c); Snyder v. Lovercheck, 992 P.2d 1079, 1083 (Wyo. 
1999).  We review a summary judgment 
in the same light as the district court, using the same materials and following 
the same standards. Id.; 40 North Corp. v. Morrell, 964 P.2d 423, 426 (Wyo. 
1998).  We examine the record from 
the vantage point most favorable to the party opposing the motion, and we give 
that party the benefit of all favorable inferences that may fairly be drawn from 
the record.  Id.  A material fact is one which, if proved, 
would have the effect of establishing or refuting an essential element of the 
cause of action or defense asserted by the parties.  Id.  If the moving party presents supporting 
summary judgment materials demonstrating no genuine issue of material fact 
exists, the burden is shifted to the non-moving party to present appropriate 
supporting materials posing a genuine issue of a material fact for trial.  Roberts v. Klinkosh, 986 P.2d 153, 155 
(Wyo. 1999); Downen v. Sinclair Oil Corp., 887 P.2d 515, 519 (Wyo. 1994).  We review a grant of summary judgment 
deciding a question of law de novo and afford no deference to the district court's 
ruling.  Roberts v. Klinkosh, 986 P.2d  at 156; Blagrove v. JB Mechanical, Inc., 934 P.2d 1273, 1275 (Wyo. 
1997).

 

                                  
DISCUSSION

 

[¶11]     Because this case presents our first 
opportunity to interpret the Wyoming LLC act, we make a few preliminary 
observations.  Wyoming initiated a 
national movement in 1977 when it adopted the first limited liability company 
act in the United States.  See 
Carter G. Bishop, Treatment of Members Upon Their Death and Withdrawal from a 
Limited Liability Company:  The Case 
for a Uniform Paradigm, 25 Stetson L.Rev. 255, 256 (1995); 1977 Wyo. Sess. Laws 
ch. 158.  As a business entity, 
limited liability companies are a conceptual hybrid, sharing some of the 
characteristics of partnerships and some of corporations.  "In general, the purpose of forming a 
limited liability company is to create an entity that offers investors the 
protections of limited liability and the flow-through tax status of 
partnerships." Jonathan R. Macey, The Limited Liability Company:  Lessons for Corporate Law, 73 Wn.U.L.Q. 
433, 434 (1995); Tassma A. Powers & Deby L. Forry, Partnership Taxation 
& the Limited Liability Company:  
Check out the Check-the-Box Entity Classification, 32 Land & Water 
L.Rev. 831 (1997).

 

[¶12]      Little case law exists regarding a 
member's interest in a LLC.  
Regardless, the precedential value of cases from other jurisdictions is 
questionable:  "Widely divergent 
rules on the effects of member dissociation will ultimately create confusion and 
inhibit the development of uniform case law.  As a result, case law will have little 
precedential value from state to state."  
See Carter G. Bishop, Treatment of Members Upon Their Death and 
Withdrawal from a Limited Liability Company:  The Case for a Uniform Paradigm, 25 
Stetson L.Rev. 255, 261-63 (1995). Therefore, we must focus our review on the 
Wyoming LLC act as well as Wyoming.com's Articles of Organization and Operating 
Agreement.

 

 [¶13]    
Under the Wyoming LLC act, a member's interest in an LLC consists of 
economic and non-economic interests.  
One interest is a member's capital contribution, which a member may 
withdraw under certain conditions.  
Wyo. Stat. Ann. §§ 17-15-115 and 120.  A member also generally has the right to 
receive profits.  Wyo. Stat. Ann. § 
17-15-119.  A member's interest also 
usually grants him the ability to participate in management.  Wyo. Stat. Ann. § 17-15-116.  Overall, a member's interest is 
transferable, although the management rights of a transferee may be 
limited.  Wyo. Stat. Ann. § 
17-15-122.  While these statutory 
provisions provide some guidance 
regarding a member's interest, we must also look at an LLC's operating agreement 
and articles of organization.

 

[¶14]      Turning to the issues presented, 
we first address whether Lieberman's withdrawal triggered dissolution of 
Wyoming.com.  Wyo. Stat. Ann. § 
17-15-123(a)(iii) (Lexis 1999)5 requires that, upon withdrawal of a 
member, the LLC must dissolve unless all the remaining members of the company 
consent to continue under a right to do so stated in the articles of 
organization.  Paragraph 9 of the 
Articles of Organization of Wyoming.com LLC permits 
continuation:

 

9. 
Continuity. The remaining members of the LLC, providing they are two or 
more in number, will have the right to continue the business on the death, 
retirement, resignation, expulsion, bankruptcy or dissolution of a member or 
occurrence of any other event which terminates the continued membership of a 
member in this LLC, in accordance with the voting provisions of the Operating 
Agreement of the Company.

 

The minutes of a March 17, 
1998, special meeting of Wyoming.com reflect that the remaining members of 
Wyoming.com elected to continue the LLC after Lieberman's departure.6  This set of undisputed facts7 establishes there was no 
dissolution, and Lieberman is not entitled to distribution of assets under Wyo. 
Stat. Ann. § 17-15-126,8 as he 
claimed.

 

[¶15]     We next address the propriety of the 
return of contributions to capital.  
In his notice of withdrawal, Lieberman invoked Wyo. Stat. Ann.§ 
17-15-120, which provides in pertinent part:

 

            § 
17-15-120. Withdrawal or reduction of members' contributions to 
capital.

 

(a) A member shall not receive out of limited 
liability company property any part of his or its contribution to capital 
until:

 

(i) All liabilities of the limited liability company, 
except liabilities to members on account of their contributions to capital, have 
been paid or there remains property of the limited liability company sufficient 
to pay them;

 

(ii) The consent of all members is had, unless the 
return of the contribution to capital may be rightfully demanded as provided in 
this act;

 

(iii) The articles of organization are cancelled or 
so amended as to set out the withdrawal or reduction.

 

(b) Subject to the provisions of subsection (a) of 
this section, a member may rightfully demand the return of his or its 
contribution:

 

                        
* * *

 

(ii) Unless otherwise prohibited or restricted in the 
operating agreement, after the member has given all other members of the limited 
liability company prior notice in writing in conformity with the operating 
agreement.  If the operating 
agreement does not prohibit or restrict the right to demand the return of 
capital and no notice period is specified, a member making the demand must give six (6) months 
prior notice in writing.

 

In applying § 
17-15-120(b)(ii), we note that Wyoming.com's Operating Agreement does not 
prohibit or restrict the right of a member to demand the return of capital 
contribution.  It is undisputed that 
Lieberman's stated capital contribution was $20,000 when the LLC was formed and 
that no subsequent amendment to the Articles of Organization changed the stated 
amount of his contribution.  
Furthermore, the remaining members of Wyoming.com agreed to return 
$20,000 to Lieberman, and neither party contends he is not entitled to the 
return of $20,000.  Under these 
circumstances, Lieberman is entitled to the return of his capital contribution 
pursuant to Wyo. Stat. Ann. § 17-15-120.9  However, the question is whether the 
return is limited to the sum of $20,000.

 

 [¶16]    
Lieberman claims the term "contribution to capital" found in Wyo. Stat. 
Ann. § 17-15-120 should be interpreted to encompass the fair market value of his 
interest in the LLC and that his return should not be limited to the amount of 
his initial capital contribution.  
At this juncture, a distinction must be drawn between withdrawal of a 
member's capital contribution and the withdrawal from membership in an LLC, 
often termed dissociation. After a thorough review of § 17-15-120, we conclude 
nothing in that provision contemplates a member's rights upon dissociation.  Besides the fact that § 17-15-120 speaks 
only to withdrawal of capital contributions, other provisions in the LLC act 
support our conclusion that § 17-15-120 does not govern dissociation.  The following passage from § 17-15-119, 
which controls division of profits, envisions withdrawal of capital contribution 
without dissociation:  "If the 
operating agreement does not so provide, distributions shall be made on the 
basis of the value of the contributions made by each member to the extent they 
have been received by the limited liability company and have not been 
returned."  This quoted material 
clearly contemplates a situation where a member has withdrawn some (or even all) 
of his capital contribution but has not dissociated as a member.  We conclude a withdrawal of capital 
contributions pursuant to § 17-15-120 does not also govern a member's rights 
upon dissociation.

 

[¶17]      In addition, we conclude § 
17-15-120 permits the return of only the initial or stated capital contribution 
of a member.  First and foremost, 
nothing in § 17-15-120 indicates that fair market value of a member's interest 
is to be included in the amount to be paid to a member upon withdrawal of that 
member's capital contribution.  In 
addition, § 17-15-129(b)(i) requires amendment to an LLC's articles of 
organization when the amount or character of contributions changes.  Thus, the amount of a member's capital 
contribution is a constant not subject 
to market fluctuations.  Numerous 
LLC acts from other states do allow a member to receive the fair market value 
(or fair value) of the member's interest.  
However, those provisions generally contemplate dissociation, not simply 
withdrawal of capital contributions.10

 

[¶18]      The foregoing discussion disposes 
of Lieberman's claim that he is entitled to demand dissolution under Wyo. Stat. 
Ann. § 17-15-120(d), which provides in pertinent part:

 

            17-15-120. 
Withdrawal or reduction of members' contributions to 
capital.

 

                        
* * *

 

(d) A member of a limited liability company may have 
the limited liability company dissolved and its affairs wound up 
when:

 

(i) 
The member rightfully but unsuccessfully has demanded the return of his or its 
contribution[.]

 

To compel dissolution under 
this provision, Lieberman's demand for the return of his capital contribution 
must have been unsuccessful.  The 
record establishes, and Lieberman does not deny, that Wyoming.com offered to 
return his $20,000 capital contribution.  
Because Lieberman has been offered all that to which he is entitled, his 
demand for the return of his capital contribution has not been unsuccessful for 
purposes of § 17-15-120(d)(i).  He, 
therefore, cannot compel dissolution under § 17-15-120(d)(i).  This, however, does not end our 
discussion.

 

[¶19]      Having determined that § 17-15-120 
does not control a member's rights upon dissociation, we must determine what 
became of Lieberman's interest, other than his capital contribution, in 
Wyoming.com. Unfortunately, it is unclear from the district court's decision 
letter precisely what became of Lieberman's ownership interest.  The Articles of Organization of 
Wyoming.com credited Lieberman with a 40% ownership interest in Wyoming.com, and 
he now argues he is entitled to payment for this interest at fair market 
value.  In the alternative, he 
contends he retains that 40% interest because the district court has not 
resolved that portion of the parties' dispute.11  Wyoming.com 
disagrees.

 

 [¶20]    
We begin by examining Lieberman's notice of withdrawal.  Lieberman strongly disputes any 
contention that he has simply forfeited his interest, other than his capital 
contribution, in the LLC.  After 
examining the notice of withdrawal, we cannot say, as a matter of law, that 
Lieberman forfeited his interest upon his withdrawal because nothing in his 
withdrawal indicates his intent to do so.  
Indeed, Lieberman's demand for "his share of the current value of the 
company," whose value he estimated at $400,000, "based on a recent offer from 
the Majority Shareholder," indicates he would not easily part with, much less 
forfeit, his interest. Because we cannot say that, as a matter of law, 
Lieberman's withdrawal amounted to forfeiture of his interest, and because there is no statutory provision governing 
dissociation, we look to Wyoming.com's Operating Agreement to determine 
Lieberman's remedy.

 

[¶21]      Under the Wyoming.com's Operating 
Agreement, a member's equity interest was to be represented by a membership 
certificate.  The Operating 
Agreement provides:

 

    
ARTICLE IV

 

    
Membership Certificates and their Transfer

 

4.1   
Certificates. Membership Certificates representing equity interest 
in the Company will be in the form determined by the Members.  Membership Certificates must be signed 
by the President and by all other Members.  
The name and address of the person to whom the Membership Certificate is 
issued, with the percentage of ownership represented by the certificate, must be 
entered in the Certificate Register of the Company.  In case of a lost, destroyed or 
mutilated Membership Certificate, a new one may be issued on the terms and 
indemnity to the Company as the Members may prescribe.

 

4.2   
Certificate Register. A Certificate Register will be maintained 
showing the names and addresses of all members, their total percentage of 
ownership represented by Membership Certificates, and their respective amount of 
capital contribution. Any and all changes in Members or their amount of capital 
contribution may be formalized by filing notice of the same with the Secretary 
of State by amendment of the Articles of Organization.

 

4.3   
Transfers of Shares. Any Member proposing a transfer or assignment 
of his Certificate must first notify the Company, in writing, of all the details 
and consideration for the proposed transfer or assignment.  The Company, for the benefit of the 
remaining Members, will have the first right to acquire the equity by 
cancellation of the Certificate under the same terms and conditions as provided 
in the formal Articles of Organization as filed with the Wyoming Secretary of 
State for Members who are deceased, retired, resigned, expelled, or 
dissolved.

 

If 
the Company declines to elect this option, the remaining Members who desire to 
participate may proportionately (or in the proportions as the remaining Members 
may agree) purchase the interest under the same terms and conditions first 
proposed by the withdrawing Member.

 

If 
the transfer or assignment is made as originally proposed and the other Members 
fail to approve the transfer or assignment by unanimous written consent, the 
transferee or assignee will have no right to participate in the management of 
the business and affairs of the Company or to become a Member.  The transferee or assignee will only be 
entitled to receive the share of the profit or other compensation by way of 
income and the return of contributions to which that Member would otherwise be 
entitled.

 

            
Provision 2.5 provides:

 

2.5   
Quorum. At any meeting of the Members, a majority of the equity 
interests, as determined from the capital contribution of each Member as 
reflected by the books of the Company, represented in person or by proxy, will 
constitute a quorum at a meeting of Members.

 

            
Provision 2.7 provides:

 

2.7   
Voting by Certain Members. Membership Certificates standing in the name 
of a corporation, partnership or Company may be voted by the officer, partner, 
agent or proxy as the Bylaws of the entity may prescribe or, in the absence of 
such provision, as the Board of Directors of the entity may determine.  Certificates held by a trustee, personal 
representative, administrator, executor, guardian or conservator may be voted by 
him, either in person or by proxy, without a transfer of the certificates into 
his name.

 

[¶22]   Under these provisions, it is clear 
that a member's interest in Wyoming.com was to be represented by membership 
certificates.  There is nothing in 
the record indicating what became of Lieberman's membership certificate; there is no indication it has been 
canceled or forfeited.

 

[¶23]      Wyoming.com's action against 
Lieberman was commenced as a declaratory judgment action.  The stated purpose of the Uniform 
Declaratory Judgments Act is "to settle and to afford relief from uncertainty 
and insecurity with respect to legal 
relations * * *."  Wyo. Stat. Ann. § 
1-37-114 (Lexis 1999).  The act is 
to be liberally construed to this end.  
Id.; Reiman Corp. v. City of Cheyenne, 838 P.2d 1182, 1185 (Wyo. 1992); 
In re General Adjudication of All Rights to Use Water in the Big Horn River 
System, 753 P.2d 76, 114 (Wyo. 1988); Brimmer v. Thomson, 521 P.2d 574, 577 
(Wyo. 1974).

 

As a measure of preventive justice, the declaratory 
judgment probably has its greatest efficacy.  It is designed to enable parties to 
ascertain and establish their legal relations, so as to conduct 
themselves             
accordingly, and thus avoid the necessity of future 
litigation.

 

Reiman Corp. v. City of 
Cheyenne, 838 P.2d  at 1185 (quoting Edwin M. Borchard, The Declaratory Judgment 
- A Needed Procedural Reform (Part II), 28 Yale L.J. 105, 110 (1918)).  Here, the parties remain uncertain as to 
their legal relationship because it is unclear what became of Lieberman's 
ownership or equity interest (as represented by a membership certificate).  Therefore, we conclude it appropriate to 
remand to the district court for a full declaration of the parties' 
rights.

 

                                  
CONCLUSION

 

 [¶24]    
We affirm the district court's determination that Wyoming.com is not in a 
state of dissolution and that Lieberman is entitled to the return of his capital 
contribution, $20,000. However, questions remain regarding Lieberman's equity 
interest, which was to be represented by his membership certificate.  This case is thus remanded for a full 
resolution of the controversy between the parties.

    

FOOTNOTES

  1Wyo. Stat. Ann. § 17-15-107(a)(v) 
(Lexis 1999) requires the articles of organization of an LLC to set forth the 
total amount of cash and a description and agreed value of property other than 
cash contributed to the LLC.

 

  2Wyo. Stat. Ann. § 17-15-115 (Lexis 
1999), contributions to capital, provides:

 

   The contributions to capital of a 
member to the limited liability company may consist of cash or other property, 
promissory notes or services rendered or to be rendered.

  

   
3Wyo. Stat. Ann. § 17-15-129(b)(i) 
(Lexis 1999) requires that an LLC amend its articles of organization when there 
is a change in the amount or the character of the contributions to 
capital.

  

   
4Paragraph 7.4 of the Operating 
Agreement provides, "Any officer may be removed at any time by the Members with 
or without cause."

 

   
5Wyo. Stat. Ann. § 17-15-123(a)(iii) 
provides:

    (a) A limited liability company 
organized under this chapter shall be dissolved upon the occurrence of any of 
the following events:

                                     
* * *

      (iii) Upon the death, retirement, 
resignation, expulsion, bankruptcy, dissolution of a member or occurrence 
of any other event which terminates the continued membership of a member in the 
limited liability company, unless the business of the limited liability company 
is continued by the consent of all the remaining members under a right to do so 
stated in the articles of organization of the limited liability 
company.

 
   
6Although Lieberman argues he was 
expelled from the LLC, neither the Operating Agreement nor Wyo. Stat. Ann. § 
17-15-123(a)(iii) draws a distinction between expulsion and 
withdrawal.

  

   
7We make our decision based on the 
record presented.  However, we 
observe there may be an issue whether all the remaining members of Wyoming.com 
agreed to continue the LLC after Lieberman's withdrawal.  In his brief in support of his motion 
for summary judgment, Lieberman asserted the Articles of Organization had been 
amended on February 3, 1997, to reflect an ownership change and that one Forrest 
Sprout held a 1% interest in the LLC.  
The minutes of the meeting triggered by Lieberman's withdrawal do not 
indicate that Sprout participated in the decision to continue Wyoming.com.  However, because Lieberman 
supported the 
contention in his brief with neither an affidavit, the amendment to the 
articles, nor any other evidence, we cannot consider the legal ramifications of 
Sprout's non-participation in the decision to continue.  In addition to not knowing whether the 
amendment was made, we know neither whether Sprout remained a member when the 
decision to continue was made nor do we know the extent of Sprout's rights to 
participate in such a decision.  See 
Wyo. Stat. Ann. § 17-15-122 (unless all remaining members of the LLC agree, "the 
transferee of a member's interest shall have no right to participate in the 
management of the business and affairs of the limited liability company or to 
become a member.")

 

   
8Wyo. Stat. Ann. § 17-15-126, 
Distribution of assets upon dissolution, provides:

 

     (b) Subject to any 
statement in the operating agreement, members share in the limited 
liability

   company assets in respect to their 
claims for capital and in respect to their claims for profits or for 
compensation by way of income on their contributions, respectively, in 
proportion to the respective amounts of the claims.

 

 Even if Wyoming.com were in a state of 
dissolution, § 17-15-126(b) is "subject to any statement in the operating 
agreement," and Article VI of the Operating Agreement would appear to control 
liquidation of Wyoming.com's assets.

 

   
9Pursuant to Wyo. Stat. Ann. § 
17-15-121, a contributor who withdraws capital contributions remains 
liable:

 

   (d) When a contributor has 
rightfully received the return in whole or in part of the capital of his or its 
contribution, the contributor is nevertheless liable to the limited liability 
company, for a period of six (6) years after return of the capital contribution, 
for any sum, not in excess of the return without interest, necessary to 
discharge its liability to all creditors of the limited liability company who 
extended credit during the period the capital contribution was held by the 
limited liability company or whose claims arose before the 
return.

  

   
10See Ariz. Rev. Stat. Ann. § 29-707 
(West 1998 Supp.); Ark. Code Ann. § 4-32-603 (Michie 1996 Repl.) (Distributions 
on an event of dissociation); Del. Code Ann. Tit. 6 § 18-604 (1999) 
(Distribution upon resignation); Fla. Stat. Ann. § 608.427 (West 2000 Supp.) 
(Withdrawal of member and distribution upon withdrawal); Ga. Code Ann. § 
14-11-405 (Harrison 1999 Supp.) (Distributions to disassociated members); Ill. 
Ann. Stat. ch. 805, para. 180/35-60 (West 2000 Supp.); Ind. Code Ann. § 
23-18-5-5.1 (Michie 2000 Supp.) (Rights of dissociating member); Iowa Code Ann. 
§ 490 A. 805 (West 1999) (Distribution upon withdrawal); Mich. Stat. Ann. § 
21.198(4305) (Law. Co-op 2000 Supp.) (Distributions to withdrawing member); Mo. 
Ann. Stat. § 347.103 (Vernon Supp. 2000); N.J. Stat. Ann. 42:2B-39 (West Supp. 
2000) (Member entitled to receive distribution upon resignation); N.M. Stat. 
Ann. § 53-19-24 (Michie Supp. 1993) (Distribution on event of dissociation); 
N.Y. Ltd. Liab. Co. Law Vol. 32A § 509 (McKinney Supp. 2000) (Distribution upon 
withdrawal); Wis. Stat. Ann. § 183.0604 (West Supp. 1999); Franklin E. Gevurtz, 
Squeeze-outs and Freeze-outs in Limited Liability Companies, 73 Wn.U.L.Q. 497, 
514-15 n. 95 (1995).

  

  11In his brief, Lieberman repeatedly 
claims his equity interest is 37%.  
Again, however, based on the record before us, we will use the 40% 
figure.