2019 -- H 5682

========

LC001537

========

     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2019

____________

A N   A C T

RELATING TO CORPORATIONS, ASSOCIATIONS, AND PARTNERSHIPS -- THE RHODE

ISLAND LIMITED-LIABILITY COMPANY ACT

     Introduced By: Representatives Filippi, Place, Price, and Nardone

     Date Introduced: February 27, 2019

     Referred To: House Corporations

     It is enacted by the General Assembly as follows:

     SECTION 1. Chapter 7-16 of the General Laws entitled "The Rhode Island Limited-

Liability Company Act" is hereby amended by adding thereto the following section:

     7-16-77. Avoidance of dissolution by unit buyout.

     Whenever a petition for dissolution of a LLC is filed by one or more members

(subsequently in this section referred to as the "petitioner") pursuant to § 7-1.2-1314 or a right to

compel dissolution which is authorized under § 7-1.2-1701 or is otherwise valid, one or more of

its other members may avoid the dissolution by filing with the court prior to the commencement

of the hearing, or, in the discretion of the court, at any time prior to a sale or other disposition of

the assets of the LLC, an election to purchase the units owned by the petitioner at a price equal to

their fair value. If the units are to be purchased by other members, notice must be sent to all

members of the LLC other than the petitioner, giving them an opportunity to join in the election

to purchase the units. If the parties are unable to reach an agreement as to the fair value of the

units, the court shall, upon the giving of a bond or other security sufficient to assure to the

petitioner payment of the value of the units, stay the proceeding and determine the value of the

units, in accordance with the procedure set forth in § 7-1.2-1202, as of the close of business on

the day on which the petition for dissolution was filed. Upon determining the fair value of the

units, the court shall state in its order directing that the units be purchased, the purchase price and

the time within which the payment is to be made, and may decree any other terms and conditions

of sale that it determines to be appropriate, including payment of the purchase price in

installments extending over a period of time, and, if the units are to be purchased by members, the

allocation of units among members electing to purchase them, which, so far as practicable, are to

be proportional to the number of units previously owned. The petitioner is entitled to interest, at

the rate on judgments in civil actions, on the purchase price of the units from the date of the filing

of the election to purchase the units, and all other rights of the petitioner as owner of the units

terminate on that date. The costs of the proceeding, which include reasonable compensation and

expenses of appraisers but not fees and expenses of counsel or of experts retained by a party, will

be allocated between or among the parties as the court determines. Upon full payment of the

purchase price, under the terms and conditions specified by the court, or at any other time that is

ordered by the court, the petitioner shall transfer the units to the purchaser.

     SECTION 2. This act shall take effect upon passage.

========

LC001537

========

LC001537 - Page 2 of 3

EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO CORPORATIONS, ASSOCIATIONS, AND PARTNERSHIPS -- THE RHODE

ISLAND LIMITED-LIABILITY COMPANY ACT

***

     This act would permit a member or members of a limited-liability company to avoid

dissolution by buying the units owned by the other member or members seeking dissolution.

     This act would take effect upon passage.

========

LC001537

========

LC001537 - Page 3 of 3