I invested money in a bar, became a member of the LLC and have a signed agreement that I bought 12.5% interest. There is no operating agreement so it defaults to 805 ILCS LLC Act. I have been a member for one year and I mainly do the bookkeeping. I have made suggestions to the major owners on how to run the business legitimately but it falls on dead ears. I'm no longer comfortable with the legal aspects of the way they want to run the books and want out, even though business is picking up.I just want my original investment back. I'm afraid if I have to file court papers to disassociate I may be fined and/or penalized based on the excel spreadsheets which show the actual income vs declared. Would these spreadsheets be used to determine the value of the company & therefore my distribution?
One important fact you haven't told us: Is this LLC Manager or Member managed, because, particularly when there is no operating agreement, it makes all the difference. Withdrawing from an LLC is called "dissociating." In a Manager managed Illinois LLC, unless the Operating Agreement says to the contrary, there is no right to dissociate.
On the other hand, in a member managed Illinois LLC, you have the right to dissociate and obtain a fair value for your interest.
Your question about the spreadsheets goes to the issue of what that fair value is. Certainly the books and records of the company are relevant to the issue of the value of your membership interest, perhaps even more so if you are the person who has maintained those records. But the court, in determining the fair value of your interest, is not limited by any particular method or rules of valuation. If you can provide credible testimony that the books fail to accurately portray the result of operation of the company, then the probative value of the books declines.
You haven't mentioned, but do you have other records which might more accurately portray the results of operations? Just tearing down the "official" records won't be enough by itself, you are going to have to come up with other evidence that supports your position.
In all likelihood, if this comes down to a trial on the issue of value (it rarely does) both sides will employ expert witnesses who will seek to establish a value from the available records. These might include cash register receipts, sales tax reports, actual testimony of employees who worked in the establishment, bank statements and so forth.
If I, or my firm, can help you we will be happy to try. Our website is linked below.
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