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Pursuant to section 4.2 of MFV’s operating agreement, Ms.
Mirowski had no authority as the majority percentage member of
MFV (or as MFV’s general manager) to determine the distribution
of MFV’s capital proceeds (i.e., gross receipts from a capital
transaction, namely, a transaction not in the ordinary course of
MFV’s operations) or the allocation of profit or loss from any
capital transaction.60 With respect to the distribution of MFV’s
capital proceeds, section 4.2.3 of MFV’s operating agreement
provided that “Capital Proceeds shall be distributed and applied
by the Company” as specified in that section.61 Section 4.2.3 of
MFV’s operating agreement is unequivocal in mandating the distri-
bution (and application) of MFV’s capital proceeds as specified
in that section.
In an attempt to qualify the unequivocal words of section
4.2.3 of MFV’s operating agreement mandating the distribution of
MFV’s capital proceeds, respondent attempts to inflate the
60Pursuant to section 5.1.3.1 and 5.1.3.2 of MFV’s operating
agreement, Ms. Mirowski did not have the authority as MFV’s
general manager (or as the majority percentage member of MFV) to
undertake, inter alia, a capital transaction, the only type of
transaction under that operating agreement giving rise to capital
proceeds, unless all of MFV’s members approved.
61Section 4.2 of MFV’s operating agreement required the
allocation of profit or loss from any MFV capital transaction and
the distribution of MFV’s capital proceeds to MFV’s interest
holders in proportion to their respective capital accounts.
Respondent does not dispute that, in general, the respective
capital account balances of MFV’s interest holders matched those
interest holders’ respective percentage interests in MFV.
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Last modified: March 27, 2008