## Facts

- Daniel Holdeman and Louise Epperson formed Holdeman-Eros, L.L.C. in 2002 and executed an operating agreement allocating ownership and management authority.
- Holdeman held a 51% interest and was a member and director; Epperson held 49% and was the other member and director.
- Holdeman died shortly after formation, and his widow, Jo Ann Holdeman, was appointed executor of his estate and treated by the operating agreement as his successor-in-interest.
- The operating agreement conditioned admission of a successor-in-interest as a member on the company’s written consent; Epperson refused to consent.
- The executor filed a declaratory-judgment action seeking authority to exercise the deceased member’s rights during estate administration; Epperson and the LLC sought a declaration that the executor was only an assignee without member rights.

## Issues

1. Whether Ohio’s LLC statutes confer rights on a deceased member’s executor that override operating-agreement provisions restricting successor membership.
2. Whether an executor may exercise the decedent’s full membership rights (including management and control) or is limited to economic and informational rights, and for what duration.

## Decision

- The Supreme Court of Ohio affirmed the court of appeals and the declaratory relief granted to the executor.
- The executor could exercise the deceased member’s rights necessary to administer and settle the estate, notwithstanding the operating agreement’s consent requirement for successor membership.
- The executor’s authority was limited to the period of estate administration and to actions taken in a representative capacity for estate-settlement purposes.

## Legal Principles

- When an LLC operating agreement conflicts with mandatory provisions of Ohio’s LLC statute, the statute controls to the extent of the conflict.
- A deceased LLC member’s estate or personal representative may exercise the member’s rights needed to protect, value, and administer the estate’s interest, even if the agreement restricts admission of successors as “members.”
- Any executor authority to exercise management or control rights is temporary and bounded by fiduciary duties and the objective of timely estate administration.

## Conclusion

The court held that, during estate administration, an executor may exercise a deceased Ohio LLC member’s rights (including management rights when necessary) to settle the estate, and contractual consent requirements for successor membership cannot eliminate that statutory authority.


Holdeman v. Epperson, 857 N.E.2d 583 (Ohio 2006)