Reference no: EM132176213
Blushing Brides, L. L. C., a publisher of wedding planning magazines in Columbus, Ohio, opened an account with Gray Printing Co. in July 2000. On behalf of Blushing Brides, Louis Zacks, the firm’s member-manager, signed a credit agreement that identified the firm as the purchaser and required payment within thirty days. Despite the agreement, Blushing Brides typically took up to six months to pay the full amount for its orders. Gray printed and shipped 10,000 copies of a fall/ winter 2001 issue for Blushing Brides but had not been paid when the firm ordered 15,000 copies of a spring/ summer 2002 issue.
Gray refused to print the new order without an assurance of payment. On May 22, 2002 Zacks personally signed a promissory note payable to Gray within thirty days for $14,778, plus interest at 6 percent per year. The $14,778 figure was the unpaid balance on the account for the fall/winter 2001 issue and the cost of the spring/summer 2002 issue. The 6 percent per year interest rate was lower than the interest rate on the account. Gray printed the new order but by October 2002 had been paid only $7,500. Gray filed a suit in an Ohio state court against Blushing Brides and Zacks to collect the balance.
Should both defendants be held legally liable for the debt?
Under what circumstances is a member of an LLC liable for the firm’s debts?
Should a member of an LLC assume an ethical responsibility to meet the obligations of the firm? Why or why not?