Nevada Revised Statutes 86.5415 – Members’ application for injunction and appointment of receiver when company mismanaged
1. Members holding not less than 10 percent in interest of the limited-liability company may apply to the district court in the county in which the company has its principal place of business or, if the principal place of business is not located in this State, to the district court in the county in which the company’s registered office is located, for an order appointing a receiver, and by injunction restrain the company from exercising any of its powers or doing business whatsoever, except by and through a receiver appointed by the court, whenever irreparable injury to the company is threatened or being suffered and:
Terms Used In Nevada Revised Statutes 86.5415
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Attachment: A procedure by which a person's property is seized to pay judgments levied by the court.
- county: includes Carson City. See Nevada Revised Statutes 0.033
- Foreclosure: A legal process in which property that is collateral or security for a loan may be sold to help repay the loan when the loan is in default. Source: OCC
- Fraud: Intentional deception resulting in injury to another.
- Injunction: An order of the court prohibiting (or compelling) the performance of a specific act to prevent irreparable damage or injury.
- Litigation: A case, controversy, or lawsuit. Participants (plaintiffs and defendants) in lawsuits are called litigants.
- Temporary restraining order: Prohibits a person from an action that is likely to cause irreparable harm. This differs from an injunction in that it may be granted immediately, without notice to the opposing party, and without a hearing. It is intended to last only until a hearing can be held.
(a) The company has willfully violated its charter;
(b) Its managers or managing members have been guilty of fraud or collusion or gross mismanagement in the conduct or control of its affairs and the presumption established by subsection 3 has been rebutted with respect to such conduct or control;
(c) The assets of the company are in danger of waste, sacrifice or loss through attachment, foreclosure, litigation or otherwise; or
(d) The company has dissolved, but has not proceeded diligently to wind up its affairs, or to distribute its assets in a reasonable time.
2. The application may be for the appointment of a receiver, without at the same time applying for the dissolution of the company, and notwithstanding the absence, if any there be, of any action or other proceeding in the premises pending in such court.
3. In any such application for a receivership, it is sufficient for a temporary appointment if notice of the same is given to the company alone, by process as in the case of an application for a temporary restraining order or injunction, and the hearing thereon may be had after 5 days’ notice unless the court directs a longer or different notice and different parties.
4. The court may, if good cause exists therefor, appoint one or more receivers for such purpose, but in all cases managers or managing members who have been guilty of no negligence nor active breach of duty must be preferred in making the appointment. The court may at any time for sufficient cause make a decree terminating the receivership, or dissolving the company and terminating its existence, or both, as may be proper.
5. Receivers so appointed have, among the usual powers, all the functions, powers, tenure and duties to be exercised under the direction of the court as are conferred on receivers and as provided pursuant to NRS 86.5412, 86.5413 and 86.5414, whether the company is insolvent or not.
6. The requirement to hold not less than 10 percent in interest set forth in subsection 1 shall be maintained from the date of and throughout the pendency of the application for the appointment of a receiver of the company.
7. The rights of a member set forth in this section may be exercised by a noneconomic member if specifically set forth in the articles of organization or the operating agreement.