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Updated about 1 year ago on . Most recent reply

User Stats

30
Posts
23
Votes
Asa Hunt
  • Rental Property Investor
  • Dallas, TX
23
Votes |
30
Posts

Defaulting during capital call: what happens?

Asa Hunt
  • Rental Property Investor
  • Dallas, TX
Posted

Hi, folks. It looks like there's a mandatory capital call forthcoming in a project I'm an LP in. I can't contribute more money at this time so have no choice but to be in "default".

Besides not being able to collect distributions, if the project goes under, will I at least be entitled to my original investment amount if there are funds left over to return investor capital?

This is the language in the company agreement:

" a Defaulting Member shall be entitled only to the return of the balance in the Member’s Capital Account without any interest thereon."

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