Suppose the operating agreement of an LLC insists that all investors receive their pro rata share of all cash flows when a property is liquidated from the portfolio. If all 15 investors contributed an equal amount of equity in establishing the LLC, each investor should receive how much from the liquidation of a property valued at $3,500,000.

Question

Quizplus · Accepted Answer

Since all investors contributed an equal amount of equity, each investor would be entitled to an equal portion of the liquidation proceeds. To calculate this, we divide the total value of the property by the number of investors:

$3,500,000 / 15 investors = $233,333 per investor. Therefore, each investor should receive $233,333 from the liquidation of the property.

Suppose the Operating Agreement of an LLC Insists That All