Dora Bay LLC operates a long shoring venture in Ketchikan, Alaska, loading logs and other cargo onto ships bound for Asia. The LLCs operating agreement provides that Dora Bay will be a member-managed LLC. The five members of the LLC never have meetings. They rely on word of mouth, one to another. They also have kept very poor records. A tugboat company is suing the LLC and its members personally for unpaid bills. Should the members be personally liable?

Yes, lack of formalities is a ground for piercing the veil and denying members limited liability.

Yes, because maintenance of books and records is a statutory requirement which the LLC members have violated.

No, LLC statutes contemplates informality which alone should not be grounds for piercing the veil.

Yes, because LLC members have no limited liability if they permit the LLC to engage in ultra-hazardous activities such as long shoring.