Interest contemplated by draft operating agreement

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Reference no: EM132138748

Clarissa Hendricks, a hedge fund operator, sued her investing partners, Bruno Moretti and Brandon Washington, for breach of contract, claiming that they had agreed to change the compensation provisions in their limited liability company (LLC) operating agreements. The agreements provided that if a founder left, he or she would receive only his/her capital account and earned income for that year. Over a year-and-a-half period, Hendricks’ lawyers prepared and circulated nine drafts of a new operating agreement that would have given each founder a declining percentage of his/her interest for six years upon retirement or death. None of the three founders ever signed the new operating agreement. Although Hendricks was paid more than $100 million after she left the LLC in 2014 (which represented her 2014 earned compensation and capital accounts), she claimed that Moretti and Washington had agreed to pay her the six-year declining interest contemplated by the draft operating agreement. Is Hendricks entitled to receive more than her 2014 earned compensation and capital account? Explain.

Reference no: EM132138748

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