No. The company's rulebook doesn't require a buyout, and it's not the court's job to add new rules to a private agreement. When Lieberman quit being a 'member,' he gave up his right to vote and help run the company. But he didn't give up his ownership stake, so he still owns 40% of the company's value and profits. He's stuck as a silent owner, and the company is stuck with him as an owner.

Yes. The court should have ordered a buyout. The majority's decision is unfair because it leaves Lieberman in a terrible position. The other owners can now run the company, refuse to pay out any profits, and Lieberman is left with a 40% stake that is practically worthless. He can't sell it, and he gets no money from it, but he might still have to pay taxes on it. Common sense says that if the rules allow a partner to leave, there should be a way for them to get paid for their share.

No, the company doesn't automatically get to take back Lieberman's share. The company's rules don't say anything about what happens to someone's share when they leave. Because there's no rule saying otherwise, Lieberman gets to keep his share of the company, even though he's not a member anymore. He can't force the company to buy his share, and the company can't force him to sell it. Everyone is stuck in the same situation they were in before because they didn't make a rule about this when they started the company.

I disagree. Even though the company's rules don't say exactly what to do, the fact that someone can leave the company and the others can keep running it means they must have meant for the leaving person to be paid for their share. It's not fair to let Lieberman keep his share but have no say in the company anymore. The other owners might use this situation to treat him unfairly. We should figure out how much Lieberman's share is worth and make the company buy it from him. We could do this by imagining how much he would get if the company closed down on the day he left.

No. In the absence of a contractual or statutory provision requiring a buyout, a member's withdrawal from an LLC does not trigger a mandatory liquidation of that member's equity interest. A member's interest is composed of both economic and non-economic rights; withdrawal terminates the non-economic (management) rights, but the member retains their economic (equity) interest. The court's reasoning is that the Wyoming LLC Act is silent on the fate of a member's equity upon dissociation, leaving it to the members to contract on this issue. Since the Wyoming.com operating agreement contains no provision for a mandatory buyout, the court cannot create one for the parties. The court noted that the operating agreement itself contemplates the existence of non-member equity owners (in the context of transferees), which supports the conclusion that Lieberman can retain his equity without being a member. Therefore, the parties are left in the status quo: Lieberman cannot force Wyoming.com to buy his interest, and Wyoming.com cannot force him to sell it.

Yes. A member's withdrawal from an LLC should trigger a forced buyout of their entire interest at a fair value. The majority's decision creates a situation ripe for oppression, where the remaining members can operate the business, refuse to make distributions, and leave the dissociated member with a powerless, illiquid asset for which they still have tax liabilities. The dissent reasons that the right to withdraw and the right for the business to continue imply an intent to compensate the withdrawing member. Drawing on the partnership law principles that influenced the LLC statutes, the dissent argues that the default rule should be a buyout. The court should not fail to provide a remedy simply because the contract is silent; it should order a buyout valued at what the member would have received upon dissolution, which can be approximated by fair market value.

No. The agreements entered into by the members of Wyoming.com LLC do not provide for automatic liquidation of a dissociating member's equity interest. Because the operating agreement lacks specific provisions regarding the fate of a member's equity interest upon dissociation, Lieberman retains his equity interest. The Wyoming LLC Act contains no provision relating to the fate of a member's equity interest upon dissociation, leaving it up to the members to contractually provide for terms of dissociation. Upon careful review of all agreements, we find no provision mandating liquidation or buyout of a dissociating member's equity interest. Lieberman's withdrawal regarded only his non-economic membership interest, not his economic equity interest. The operating agreements clearly anticipate a situation where a person could be an equity owner but not a member. Therefore, Lieberman maintains his equity interest in Wyoming.com, but is no longer a member. He cannot force Wyoming.com to buy his interest, and Wyoming.com cannot force him to sell. The parties are left in status quo due to their failure to contractually provide for this situation.

I dissent because I believe the majority's resolution creates a situation where the remaining members can oppress the dissociated member. While the operating agreement does not expressly provide for dealing with a dissociated member's equity interest, the right to withdraw and the right of remaining members to continue the business imply that there must be some sort of buyout. The LLC statutory scheme also implies that, absent other agreement, a member has a right to terminate membership and be compensated. Lieberman clearly intended to withdraw his entire interest from the LLC. The remaining members should be required to compensate him for his interest. Absent a valuation method in the operating agreement, I would look to the statutory provisions for distribution of assets on dissolution as a proper valuation tool. The departing member's share should be valued at what they would have received had the business been dissolved on the day of termination, which could be estimated using fair market value. Payment could occur over a reasonable time period if immediate full payment would jeopardize the company's ability to operate.

Lieberman v. Wyoming. Com LLC

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