LSI 2010 Real Estate Joint Ventures conference materials.pdf

Brian Todd of Davis Wright Tremaine LLP
Andrew H. Zuccotti of K&L Gates LLP
10.1.2 Preferred Return. Second, to the Members in
proportion to and to the extent of the accrued but unpaid Preferred Return
of each Member on the date of such distribution;
Speaker 11: 14
Speaker 12: 14
10.1.3 Return of Invested Capital. Third, to the Members
in proportion to their respective Adjusted Capital Contributions until each
Member’s Adjusted Capital Contribution is zero; and
10.1.4 Residual Distribution. Thereafter, to the Members
in proportion to their respective Percentage Interests.
10.2 Liquidating Distributions. Notwithstanding Section 10.1,
distributions in liquidation of the Company shall be made to the Members
in proportion to the positive balances of their respective Capital Accounts,
as determined after taking into account all Capital Account adjustments
for the taxable year during which the liquidation occurs.
B. “Liquidation-By-Tiers-With Target Allocations” Provisions.
DEFINITIONS
“Carrying Value” means (a) with respect to any property
contributed to the Company by a Member, the fair market value of such
property, as determined in good faith by the Managing Member, reduced
(but not below zero) by all Depreciation with respect to such property
charged to the Members’ Capital Accounts and (b) with respect to any
other asset of the Company, the adjusted basis of such property for federal
income tax purposes, all as of the time of determination. The Carrying
Value of any property shall be adjusted in accordance with the second
paragraph of Section 3.9 to reflect changes, additions or other adjustments
to the Carrying Value of Company properties, as deemed appropriate by
the Managing Member.
“Deficit Capital Account” means, with respect to any Member, the
deficit balance, if any, in such Member’s Capital Account as of the end of
the taxable year, after giving effect to the following adjustments:
(a) credit to such Capital Account any amount that such
Member is obligated to restore to the Company under Regulation Section
1.704-1(b)(2)(ii)(c), as well as any addition thereto pursuant to the next to
last sentences of Regulation Sections 1.704-2(g)(1) and (i)(5); and
(b) debit to such Capital Account the items described in
Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6).
This definition is intended to comply with the provisions of Regulation
Sections 1.704-1(b)(2)(ii)(d) and 1.704-2, and shall be interpreted
consistently with those provisions.
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Law Seminars International | Real Estate Joint Ventures and Funds | 02/08/10 in Seattle, WA