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MFV is undertaken, section 4.2 of MFV’s operating agreement
requires the allocation of profit or loss and the distribution
and the application of capital proceeds from that capital trans-
action as specified in that section.
On the record before us, we find that section 4.5.1 of MFV’s
operating agreement did not give Ms. Mirowski as the majority
percentage member of MFV (or as MFV’s general manager) the
authority to determine the timing and the amount of distributions
of MFV’s cash flow and MFV’s capital proceeds.62 On that record,
62In so finding, we have considered respondent’s contention
that Ms. Mirowski had “by implication” the power to determine the
respective amounts of MFV’s cash flow and MFV’s capital proceeds
to be distributed. According to respondent,
[MFV’s operating agreement] Section 4.2.3, which states
that the amount of capital proceeds to be distributed
is to be reduced by “any reserves which the General
Manager deems necessary for liabilities or obligations
of the Company . . . .”, gives decedent the power to
determine the amount of such reserves, and by implica-
tion, the amount of such distributions. [MFV’s operat-
ing agreement] Section 1 [defines] “Cash Flow” [and]
gives decedent a similar power “to pay or establish
reasonable reserves for future expenses, debt payments,
capital improvements or replacements . . .” and thereby
the amount of distributable cash flow. * * *
Ms. Mirowski’s authority as MFV’s general manager to estab-
lish reserves was limited to establishing reserves for MFV’s
liabilities and obligations and future expenses, debt payments,
capital improvements, and replacements. Moreover, Ms. Mirowski’s
authority as MFV’s general manager to establish the types of
reserves in question was subject to the fiduciary duties imposed
on her by Maryland law. See Robinson v. Geo Licensing Co.,
L.L.C., 173 F. Supp. 2d 419, 427 (D. Md. 2001); Froelich v.
Erikson, 96 F. Supp. 2d 507, 526 (D. Md. 2000), affd. per curiam
sub nom. Froelich v. Senior Campus Living, L.L.C., 5 Fed. Appx.
(continued...)
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Last modified: March 27, 2008