Q: I am a 5% owner of a limited partnership (I file a Schedule K-1 every year) and am looking to cash out on my shares.
An estranged family member is the majority owner of the partnership and I do not have direct contact to him, only through his attorney. I would like to know my options of how to receive payout of my shares and what I am legally entitled to. The investment is incorporated in Delaware.
A: the answer to this is heavily dependent on the Limited Partnership document. Most family LPs have restrictions on sale/transfer of shares, and also some mechanism to value the shares (often at a discount) when a Limited Partner wants to cash out. This are usually set forth in detail in the LP Agreement. You want to review that with an attorney before contacting any other partners since indicating an interest in selling may be enough to trigger the provisions in the Agreement
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