Chicago Business Litigation Lawyer Blog
Summary: When a co‑member changes the banking logins, blocks your access to the general ledger, or tells employees not to speak with you, it’s not just bad behavior—it’s a legal emergency. Here’s what to do right now.
1) Treat it like a TRO/Preliminary‑Injunction case.
Illinois courts can order interim relief that restores online banking, general‑ledger access, and on‑site access; prevents dissipation of assets; and preserves the status quo ante. To obtain a preliminary injunction, plead a clearly ascertainable right, irreparable harm, a likelihood of success, and a balance of equities that favors you. In member‑managed LLCs, the Illinois LLC Act recognizes equal management rights and fiduciary duties—critical ingredients for the “ascertainable right” showing.
2) Put management and information rights front and center.
For member‑managed companies, the Act imposes duties of loyalty and care and protects access to company information; operating agreements typically echo and expand those rights. Cite 805 ILCS 180/15‑1, 15‑3 and 15‑5 and any contract provisions requiring managers to “keep and make available” company records. This combination supports immediate access orders.
3) Document the choke points.
Log every blocked login, revoked credential, and turned‑away facility visit; note who gave the directive and when. This contemporaneous record helps courts understand the urgency and scope of relief needed.
4) Don’t ignore personal guaranties.
If you guaranteed company debt, a freeze‑out can put your personal assets at risk. In appropriate cases, plead for equitable relief requiring the controlling member to refinance or otherwise secure releases of your guaranties. (Courts evaluate these requests in equity—frame the risk and the practical path to relief.)
5) Consider a fair‑value buyout path.
Oppression and fiduciary‑breach cases often end with a negotiated or court‑ordered buyout. Ask for “fair value,” and be prepared to explain why minority or lack‑of‑control discounts are inappropriate based on the conduct at issue and the statutory framework.
6) Lock down evidence.
Seek orders preserving financial systems, email, and text messages; forbid asset dissipation; and require full electronic production (bank statements, GL exports, merchant accounts).
7) Align the operating agreement with the Act.
Deadlock clauses, bank‑signature provisions, and record‑access language should dovetail with the Act’s default rules. Where the OA helps (or hurts) your position, lead with it.
8) Keep distributions and compensation in view.
Withholding customary distributions or unilaterally changing pay can be oppressive, especially when used as leverage during a freeze‑out. Plead patterns, not isolated events.
9) Propose a practical compliance plan.
Judges like workable, specific orders: who gets what access, by when, and through which systems (bank portals, accounting software, membership or POS platforms).
10) Stay outcome‑agnostic but relief‑specific.
Combine immediate access/injunction relief with longer‑term remedies like an accounting, governance fixes, and (if needed) a fair‑value separation.
Bottom line: In Illinois, freeze‑outs collide with statutory duties and management/information rights. Move quickly and ask for tailored, enforceable orders that get you back inside the business.
We prosecute and defend LLC and closely held‑company oppression cases statewide, including emergency injunctions to restore access, forensic accountings, and fair‑value buyouts. If you’re locked out—or accused of overreach—our trial team can move fast. Visit the Chicago Business Litigation Lawyer Blog for more on member disputes and remedies, or contact us at 630-333-0333 or online for a free confidential consultation.