- 31 -
from the current manager or perhaps in the form of removal of
that manager by joint majority action, followed by the
appointment of and approval from a more compliant manager.
Likewise, while a dissolution could entitle members to
liquidating distributions in proportion to positive capital
account balances, no donee acting alone could effectuate a
dissolution.
Moreover, in addition to preventing a donee from
unilaterally obtaining the value of his or her units from the
LLC, the Operating Agreement also foreclosed the avenue of
transfer or sale to third parties. The Agreement specified that
“No Member shall be entitled to transfer, assign, convey, sell,
encumber or in any way alienate all or any part of the Member’s
Interest except with the prior written consent of the Manager,
which consent may be given or withheld, conditioned or delayed as
the Manager may determine in the Manager’s sole discretion.”
Hence, to the extent that marketability might be relevant in
these circumstances, as potentially distinguishable on this point
from those in indirect gift cases such as Chanin v. United
States, 393 F.2d at 977, and Blasdel v. Commissioner, supra at
1021-1022 (both dismissing marketability as insufficient to
create a present interest where the allegedly marketable
property, an entity or trust interest, differed from the
underlying gifted property), the Agreement, for all practical
Page: Previous 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 NextLast modified: May 25, 2011