Opinion ID: 2195500
Heading Depth: 3
Heading Rank: 2

Heading: Gregory's individual claim

Text: ¶ 50. I begin by noting that the nature of a member's interest in a limited liability company is personal property. Wis. Stat. § 183.0703. As a member, Gregory has a right to receive a share of the profits and losses of New Jersey LLC and the right to vote or participate in the management of New Jersey LLC. Wis. Stat. § 183.0102(11). However, Gregory never had an interest in real property in regard to the Sheboygan warehouse. ¶ 51. I agree with the majority opinion that Gregory had the right to be dealt with fairly by members of New Jersey LLC who had a material conflict of interest in regard to the sale of the Sheboygan warehouse. [6] Majority op., ¶ 31; Wis. Stat. § 183.0402(1)(a). I also agree that if Julie and Paul acquired any improper personal profit in connection with the sale of the Sheboygan warehouse, they hold such improper personal profit in trust for Gregory. Wis. Stat. § 183.0402(2). ¶ 52. Gregory contends that Julie and Paul could not vote to sell the warehouse because they had a conflict of interest in the matter. Again, I agree with the majority opinion's conclusion that ch. 183 does not preclude a member who has a material conflict of interest in a transaction from casting a valid vote on it. Majority op., ¶ 31. Accordingly, the sale is valid, but what remains on remand is to assess whether Gregory is due a payment different from that which he has received. ¶ 53. The majority has concluded that Gregory held a 25% interest in profits, losses and votes in New Jersey LLC. Majority op., ¶ 25. I concur in the majority opinion's interpretation of the Member's Agreement. In addition, the majority opinion's interpretation is consistent with the K-1 form Gregory filed with his federal taxes. On his K-1, Gregory declared that he had a 25% interest in the profit sharing, loss sharing and ownership of capital for New Jersey LLC. ¶ 54. Gregory further claims that his right to vote on the proposed sale of the Sheboygan warehouse was violated because Julie and Paul did not give him notice of the potential sale and ask for his consent to the transaction. The majority opinion does not address this contention. Both Wis. Stat. § 183.0102(11) and Wis. Stat. § 183.0404(1) address a member's vote on matters connected with the business of a limited liability company. [7] Julie and Paul do not contend that Gregory had no right to vote, and I found nothing to support such a position. Accordingly, I conclude that Gregory did have a right to vote, give approval or consent on the sale of the Sheboygan warehouse, according to these provisions. Therefore, I compare Gregory's 25% member interest with the requirements of § 183.0404(1)(a) to determine if he had sufficient member interest to preclude the sale. ¶ 55. Wisconsin Stat. § 183.0404(1)(a) establishes that the member vote, approval or consent necessary must be  more than 50% of the value ... of the total contributions made to the limited liability company. (Emphasis added.) It is uncontested that Julie contributed 50% of the value of the contributions made to New Jersey LLC. The majority opinion concludes that Paul contributed 25% of the contributions to New Jersey LLC and that Gregory contributed 25% of the contributions. Majority op., ¶ 25. Accordingly, Gregory's interest is insufficient to satisfy the statutory criteria for member participation that will determine whether a transaction occurs. Therefore, the fact that Gregory was not given the opportunity to vote against the sale of the Sheboygan warehouse had no effect on whether a valid sale occurred.