-10-
payments on the recourse notes. Petitioner asserts that Wyo.
Stat. Ann. sec. 17-15-121(a) and (c) allows a member of a limited
liability company to promise to contribute additional capital to
the company and permits a creditor of the company to enforce that
promise in order to receive payment on a debt owed to the
creditor by the company.
As discussed in detail below, we disagree with petitioner’s
argument and assertion as applied to the facts at hand. First,
from a factual point of view, HBW did not through the DRO make an
unconditional promise to contribute additional capital to LCL.
To the contrary, the DRO requires that HBW contribute additional
capital to LCL only if: (1) HBW liquidates its interest in LCL
and (2) then has a deficit in its capital account. For this
purpose, as discussed further below, LCL’s recourse creditor has
no right to force HBW to liquidate its interest in LCL to cause
an additional contribution under the DRO. Hence, HBW’s personal
liability for repayment of LCL’s recourse debt is neither fixed
nor definite but is generally contingent on HBW voluntarily
causing a liquidation of its interest in LCL. Even then, HBW’s
contribution of additional capital is required under the DRO only
if HBW then has a deficit capital account. Second, even if both
conditions are met, the DRO does not impose on HBW an obligation
to contribute funds in the amount necessary to satisfy its
proportionate share of any unpaid debt owed by LCL; the DRO
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