It looks like Scott has created an agreement that is highly leveraged in his favor even if he defaults. He is unlikely going to agree to amendments voluntarily. He has defaulted because he wants 50% ownership of an EDA, LLC product and complete control of the sale of and the profit distribution of the sale. He has no right to EDA products, but by not funding the remaining capitalization or allowing us to resell the legacy and pay him off he has our home and livelihood blocked and ties up our property asset, thus destroying our end of life security and what it has taken us 50 years to build. What leverage do we have?
You’re right—Scott’s playbook is to sit on a default, block every remedy and force you into submission. But the Agreement and Delaware law give you multiple levers, even if he won’t sign off on amendments. Here’s how to weaponize what you already have, plus the threat of litigation, to force his hand:
Declare & Escalate His Capitalization Default
• Under Section 1.01, issue a formal “Cure Notice” demanding his Initial, Subsequent and Ongoing Investments within 30 days.
• If he fails, treat him as in continuous Capitalization Default—this strips him of certain rights (see Sale penalties in Sections 5.01(b)/6.01(b)).
• Send a written Buy-Out Notice by Day 31, demanding you purchase his 24.4% interest at Book Value minus 10% (per the amendment language we drafted). Even if not yet adopted, this notice puts him on formal notice that you view his stake as callable.
Leverage the Sale-In-Default Haircut to Force a Transaction
• Section 5.01(b)/6.01(b) say: if you sell “all or substantially all” of the Property while he’s in Default, his share gets cut by 20%.
• As Managers, you can structure a sale of a 90%-plus piece (e.g. a carve-off parcel or partial business line) to a third party or affiliate.
• That sale becomes a “Sale of the Property” triggering the haircut, shrinking his equity and creating real economic pain—pressuring him to fund or negotiate.
Seek Equitable Dissolution in Court
• Delaware’s LLC Act § 18-802(4) lets a Member petition the Court of Chancery for dissolution when it’s “not reasonably practicable” to continue under the Agreement.
• His refusal to fund, blocking sale, freezing distributions and threatening your home is precisely the kind of deadlock + oppression that wins a § 18-802 petition.
• File in Delaware (or a WI court under your local statute if more convenient) for equitable dissolution and the appointment of a receiver. A receiver can sell the Property, pay creditors and get you out of the stalemate.
Injunctive Relief & Specific Performance
• In parallel, file for injunctive relief in Eau Claire County:
– Asking the court to compel PV Legacy to fund his contributions (specific performance).
– Or to enjoin him from exercising any governance rights (ROFR, voting) while in Default.
• A temporary restraining order or preliminary injunction often forces a quick settlement—he’ll pay up rather than risk a quick court loss.
Use Article IX’s Involuntary Transfer Mechanism
• Section 9.04 lets the Company and the Other Members buy any “Involuntary Transfer” (e.g., a lien, bankruptcy or garnishment) at 20% of fair value.
• You can record a creditors’ lien against his Membership Interest for the unpaid default contributions. Once that lien exists, it triggers an “Involuntary Transfer” right—letting you buy him out at a steep discount.
Call on the Mortgage & Guarantee
• Under Section 7.06, you can cause the LLC to pay any missed mortgage payments directly.
• Then force PV Legacy to reimburse you (plus late fees). If he refuses, notify the lender that you’re stepping in, putting real money on the table.
• Hit his GP personally—pressure will mount to cure or negotiate.
Leverage Tax & Inspection Triggers
• Obstructing the LLC’s filings or K-1 deadlines can expose PV Legacy to tax penalties—which you can then demand he reimburse (Section 6.02–6.03).
• Use Section 11.02’s inspection rights to do a deep dive audit: any misallocation or secret affiliate deal gives you cause to seek removal or equitable relief.
Threaten Fee-Shifting & Arbitration
• Point out that under your proposed Fee-Shifting Amendment, any meritless litigation by him will cost him his fees. Even if not yet adopted, the prospect of having to pay your legal bills after a court fight will push him toward a quick deal.
• Propose arbitration in Eau Claire under AAA Commercial Rules—cheaper, faster and private. The mere threat of public Chancery litigation often brings recalcitrant Members to the table.
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Bottom line: you have real stick options that don’t require his voluntary sign-off:
• Trigger the Capitalization Default and Buy-Out Right.
• Structure a partial sale to invoke the 20% haircut.
• File for equitable dissolution/receiver or injunctive relief.
• Record a lien to force an Involuntary Transfer buy-out.
• Use mortgage guarantee mechanics to squeeze him financially.
Your next step is to pick the lever(s) you’re comfortable pulling and signal he must either fund or face a lawsuit that will cost him far more in time, fees and dilution than simply putting in the money he agreed to. Let me know which path you want to take first—and I’ll sketch out the exact notice or complaint you need.