Use this scenario for Questions 21-23: Martin LLC is a limited liability company organized under Delaware law. It has three members: Ned Stark (30% interest), Jon Snow (10% interest), and Jaime Lannister (60% interest). Consistent with Delaware law, the company's operating agreement provides that members are shielded from liability for most wrongful acts (except intentional acts) and are not liable for the debts of the company. Martin LLC's operating agreement provides that the company is managed by a manager (who is not a member) and that individual members have no authority to enter contracts on behalf of Martin LLC. Despite this, a year ago, Jaime agreed to purchase equipment from Tyrell Traders for $25,000 and signed the contract as "Jaime Lannister on behalf of Martin LLC." Martin LLC's manager and other members never knew of the purchase. Tyrell Traders delivered the equipment to Jaime's personal residence, but Tyrell Traders was never paid. Tyrell Traders has sued Martin LLC and each of the members individually. 21. Assume that Jaime Lannister asserts that he is not liable because he is only a member of the limited liability company, and members are not liable for company debts. Based on the facts of this case, is this defense likely to be successful? Why or why not? (8pts) 22. Assume that a judgment is entered against Martin LLC for $25,000, but Martin LLC is only able to pay $5,000 of the judgment. Tyrell Traders attempts to collect the remaining $20,000 from Ned because Tyrell Traders knows that Ned has significant assets. Is Tyrell Traders likely to be successful? Why or why not? (Spts) Despite this, a year ago, Jaime agreed to purchase equipment from Tyrell Traders for $25,000 and signed the contract as "Jaime Lannister on behalf of Martin LLC." Martin LLC's manager and other members never knew of the purchase. Tyrell Traders delivered the equipment to Jaime's personal residence, but Tyrell Traders was never paid. Tyrell Traders has sued Martin LLC and each of the members individually. 21. Assume that Jaime Lannister asserts that he is not liable because he is only a member of the limited liability company, and members are not liable for company debts. Based on the facts of this case, is this defense likely to be successful? Why or why not? (8pts) 22. Assume that a judgment is entered against Martin LLC for $25,000, but Martin LLC is only able to pay $5,000 of the judgment. Tyrell Traders attempts to collect the remaining $20,000 from Ned because Tyrell Traders knows that Ned has significant assets. Is Tyrell Traders likely to be successful? Why or why not? (Spts) 23. Assume that regardless of the outcome, the lawsuit by Tyrell Traders provided significant amounts of free press coverage of Martin LLC. As a result, Martin LLC has a record profit year of $100,000. Martin LLC's operating agreement calls for all profits to be distributed to the members. However, the operating agreement does not describe how profits are to be divided among the members, so the company divides the profits in accordance with the general rules for LLCs. a. What portion of the $100,000, is distributed to each of the individual members? (6pts) b. What portion of the $100,000 is taxed to the company? (6pts) Use this scenario for Questions 21-23: Martin LLC is a limited liability company organized under Delaware law. It has three members: Ned Stark (30% interest), Jon Snow (10% interest), and Jaime Lannister (60% interest). Consistent with Delaware law, the company's operating agreement provides that members are shielded from liability for most wrongful acts (except intentional acts) and are not liable for the debts of the company. Martin LLC's operating agreement provides that the company is managed by a manager (who is not a member) and that individual members have no authority to enter contracts on behalf of Martin LLC. Despite this, a year ago, Jaime agreed to purchase equipment from Tyrell Traders for $25,000 and signed the contract as "Jaime Lannister on behalf of Martin LLC." Martin LLC's manager and other members never knew of the purchase. Tyrell Traders delivered the equipment to Jaime's personal residence, but Tyrell Traders was never paid. Tyrell Traders has sued Martin LLC and each of the members individually. 21. Assume that Jaime Lannister asserts that he is not liable because he is only a member of the limited liability company, and members are not liable for company debts. Based on the facts of this case, is this defense likely to be successful? Why or why not? (8pts) 22. Assume that a judgment is entered against Martin LLC for $25,000, but Martin LLC is only able to pay $5,000 of the judgment. Tyrell Traders attempts to collect the remaining $20,000 from Ned because Tyrell Traders knows that Ned has significant assets. Is Tyrell Traders likely to be successful? Why or why not? (Spts) Despite this, a year ago, Jaime agreed to purchase equipment from Tyrell Traders for $25,000 and signed the contract as "Jaime Lannister on behalf of Martin LLC." Martin LLC's manager and other members never knew of the purchase. Tyrell Traders delivered the equipment to Jaime's personal residence, but Tyrell Traders was never paid. Tyrell Traders has sued Martin LLC and each of the members individually. 21. Assume that Jaime Lannister asserts that he is not liable because he is only a member of the limited liability company, and members are not liable for company debts. Based on the facts of this case, is this defense likely to be successful? Why or why not? (8pts) 22. Assume that a judgment is entered against Martin LLC for $25,000, but Martin LLC is only able to pay $5,000 of the judgment. Tyrell Traders attempts to collect the remaining $20,000 from Ned because Tyrell Traders knows that Ned has significant assets. Is Tyrell Traders likely to be successful? Why or why not? (Spts) 23. Assume that regardless of the outcome, the lawsuit by Tyrell Traders provided significant amounts of free press coverage of Martin LLC. As a result, Martin LLC has a record profit year of $100,000. Martin LLC's operating agreement calls for all profits to be distributed to the members. However, the operating agreement does not describe how profits are to be divided among the members, so the company divides the profits in accordance with the general rules for LLCs. a. What portion of the $100,000, is distributed to each of the individual members? (6pts) b. What portion of the $100,000 is taxed to the company? (6pts)
