Three special considerations come to mind. First, make certain that the LLC Operating Agreement includes a provision specifying which state's law will govern or apply to any disputes arising out of the Operating Agreement. Second, add a clause that sets forth the venue or county where any disputes will be resolved (that is, where jurisdiction will be stipulated to and proper should a complaint be filed and/or where a mediation and/or arbitration will be held. Third, the members need to agree...
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In addition, as a practical matter, you would be ill-advised to sue for $20,000 of damages. Most cases settle, so you would probably not get your legal fees reimbursed, and it will probably cost you close to $20K just to get through a good mediation. Your best net profit result will probably be, after conducting enough investigation to determine if you have a good claim, to go through a mediation without a lawyer. The legal issues here are not that complex.
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