Informal Opinion Number: 20000061

QUESTION: Attorney assisted in forming a LLC, at the request of A. In addition to A, the members of the LLC are B & C. Attorney drafted the Articles of Incorporation and filed them with the Secretary of State and also drafted the Operating Agreement, which sets forth the specifics of the business relationship between A, B & C. Attorney represented the LLC in negotiating an agreement with another company wherein the LLC agreed to act as a representative in Missouri and other surrounding states. Attorney has also represented the LLC in other miscellaneous matters. A & B have decided that they wish to dissolve the LLC and restructure their arrangement with the other company. A & B do not intend to include C in any new business ventures. The Operating Agreement provides that a majority of the members can dissolve the LLC. Attorney would like to be able to represent A in dissolving the LLC and establishing a new business venture with B. It is anticipated that C opposes dissolution and may assert claims against A & B and may assert claims in the nature of the oppression of a minority interest holder. Does Attorney have a conflict of interest in representing A since Attorney previously represented the LLC? Can Attorney continue to prepare legal documentation related to the LLC? Can Attorney defend A and possibly B against claims C might make against them in connection with dissolution of the LLC and the start up of a new business?
ANSWER: Attorney´s past representation of the LLC creates a conflict of interest under Rule 4-1.9. That conflict prohibits Attorney from representing A in dissolving the LLC and from defending A or B against claims C might make related to the dissolution. Attorney may continue to represent the LLC, as an entity. If it is possible to represent A and B in starting the new business without being involved in advising or representing them regarding the dissolution of the LLC, Attorney may represent them in starting the new business.

Informal Opinions are ethics advisory opinions issued by the Office of Legal Ethics Counsel to members of the Bar about Rule 4 (Rules of Professional Conduct), Rule 5 (Complaints and Proceedings Thereon), and Rule 6 (Fees to Practice Law) pursuant to Missouri Supreme Court Rule 5.30(c). Written summaries of select Informal Opinions are published for informational purposes as determined by the Advisory Committee of the Supreme Court of Missouri pursuant to Rule 5.30(c). Informal opinion summaries are advisory in nature and are not binding. These opinions are published as an educational service and do not constitute legal advice.

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