PART VI. MEMBER'S DISSOCIATION

 

[§428-601]  Events causing a member'sdissociation.  A member is dissociated from a limited liability companyupon the occurrence of any of the following events:

(1)  The company's having notice of the member'sexpress will to withdraw upon the date of notice or on a later date specifiedby the member;

(2)  An event agreed to in the operating agreement ascausing the member's dissociation;

(3)  The member's expulsion pursuant to the operatingagreement;

(4)  The member's expulsion by the unanimous vote ofthe other members if:

(A)  It is unlawful to carry on the company'sbusiness with the member;

(B)  There has been a transfer of substantiallyall of the member's distributional interest, other than a transfer for securitypurposes, or a court order charging the member's distributional interest, whichhas not been foreclosed;

(C)  Within ninety days after the companynotifies a  corporate member that it will be expelled because it has filedarticles of dissolution or the equivalent, its registration has been revoked,dissolved, or canceled, or its right to conduct business has been suspended bythe jurisdiction of its incorporation, the member fails to obtain a revocationof the dissolution proceedings or a reinstatement of its articles or its rightto conduct business; or

(D)  A partnership or a limited liabilitycompany that is a member has been dissolved and its business is being wound up;

(5)  On application by the company or another member,the member's expulsion by judicial determination because the member:

(A)  Engaged in wrongful conduct that adverselyand materially affected the company's business;

(B)  Wilfully or persistently committed amaterial breach of the operating agreement or of a duty owed to the company orthe other members under section 428-409; or

(C)  Engaged in conduct relating to thecompany's  business which makes it not reasonably practicable to carry on thebusiness with the member;

(6)  If the member:

(A)  Becomes a debtor in bankruptcy;

(B)  Executes an assignment for the benefit ofcreditors;

(C)  Seeks, consents to, or acquiesces in theappointment of a trustee, receiver, or liquidator of the member or of all orsubstantially all of the member's property; or

(D)  Fails, within ninety days after theappointment, to have vacated or stayed the appointment of a trustee, receiver,or liquidator of the member or of all or substantially all of the member'sproperty obtained without the member's consent or acquiescence, or failingwithin ninety days after the expiration of a stay to have the appointmentvacated;

(7)  In the case of a member who is an individual:

(A)  The member's death;

(B)  The appointment of a guardian or generalconservator for the member; or

(C)  A judicial determination that the memberhas  otherwise become incapable of performing the member's duties under theoperating agreement;

(8)  In the case of a member that is a trust or isacting as a member by virtue of being a trustee of a trust, distribution of thetrust's entire rights to receive distributions from the company, but not merelyby reason of the substitution of a successor trustee;

(9)  In the case of a member that is an estate or isacting as a member by virtue of being a personal representative of an estate,distribution of the estate's entire rights to receive distributions from thecompany, but not merely the substitution of a successor personalrepresentative;

(10)  Termination of the existence of a member if themember is not an individual, estate, or trust other than a business trust; or

(11)  A termination of a member's continued membershipin a limited liability company for any other reason. [L 1996, c 92, pt of §1]