Chicago, IL asked in Real Estate Law and Business Law for Tennessee

Q: I have a LLC in which I’m the majority member.

I have a LLC in which I’m the majority member. My partner did a hard money loan without my permission to purchase a property and the property ended in foreclosure. The hard money lender stated that there is still 25k to fulfill the lender and he will put a lien on the company. What can I do?

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1 Lawyer Answer
Anthony M. Avery
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  • Knoxville, TN
  • Licensed in Tennessee

A: Does the LLC have an Operating Agreement, By-Laws, etc.? If so, then it must be read carefully to see how property of the LLC can be encumbered or money borrowed. If not, probably only the managing member had the power to borrow for the LLC. Lender must get a Judgment first before having a Lien, which may or may not attach to anything. LLC needs an attorney. Meritorious defenses may be present.

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