An Iowa limited liability company (LLC) is recognized as a separate legal entity with a perpetual existence under Iowa law. An LLC is dissolved upon the first to occur of the following:

1. An event or circumstance that the operating agreement states causes dissolution;
2. The consent of all members;
3. Once the company has at least one member, the passage of ninety consecutive days during which the company has no members;
4. On application by a member, the entry by a district court of an order dissolving the company on the grounds that any of the following applies:
   1. The conduct of all or substantially all of the company’s activities is unlawful.
   2. It is not reasonably practicable to carry on the company’s activities in conformity with the certificate of organization and the operating agreement.
5. On application by a member or transferee, the entry by a district court of an order dissolving the company on the grounds that the managers or those members in control of the company have done any of the following:
   1. Have acted, are acting, will act in a manner that is illegal or fraudulent
   2. Have acted or are acting in a manner that is oppressive and was, is, or will be directly harmful to the applicant.

After Dissolution

Following its dissolution, the LLC continues to exist for the purpose of winding up its activities. Members and managers retain limited authority to take the actions necessary to wind up the LLC’s affairs. A manager or other person designated in the operating agreement is usually responsible for winding up an LLC. If a dissolved limited liability company has no members, the legal representative of the last person to have been a member may be appointed to wind up the activities of the company. If this legal representative declines or fails to wind up the LLC’s activities, members holding a majority in interest may nominate such a person. In some cases, the district court may order judicial supervision of the winding up of a dissolved limited liability company, including the appointment of a person to wind up the company’s activities.

Distribution of Assets

In winding up its activities, an LLC must first use its assets to pay all debts to creditors, including members who are creditors. Once an LLC has discharged all obligations to creditors, any remaining assets must first be distributed to each person owning a transferable interest that reflects contributions made by a member and not previously returned. Generally, any assets left after that must be distributed in equal shares among members and dissociated members.

Claims Against Dissolved LLCs

An LLC may also give notice of a known claim, with the deadline of the receipt of a claim to be at least 120 days after the notice is received. It may also publish notice of its dissolution in a newspaper, with action to enforce such claim to commence within 5 years of publication.

Administrative Dissolution

Administrative dissolution is an action taken by the Secretary of State that results in the loss of a business entity’s rights, powers, and authority. In some cases, an LLC might also be subject to administrative dissolution. Administrative dissolution is an action the Secretary of State takes that results in the loss of a business entity’s rights, powers, and authority. In some cases, an LLC might also be subject to administrative dissolution. Administrative dissolution is an action the Secretary of State takes that results in the loss of a business entity’s rights, powers, and authority. In Iowa, the secretary of state may commence a proceeding to administratively dissolve an LLC for several reasons. Most of these reasons relate to not submitting necessary documents or information in a timely fashion.

A limited liability company that has been administratively dissolved continues in existence but may carry on only activities necessary to wind up its activities and liquidate its assets and notify claimants.

An administratively dissolved LLC may apply to the secretary of state for reinstatement at any time after the effective date of dissolution. Before filing for reinstatement, the LLC should solve the issues that resulted in its administrative dissolution. During the process, the secretary of state will consult the department of workforce development, and if there are any remaining delinquencies or liabilities, the LLC will most likely not be reinstated. Once the LLC reinstatement is in effect, it relates back to and takes effect as of the effective date of the administrative dissolution as if dissolution had never occurred.

Official Filings

After an LLC is dissolved and its affairs are wound up, it must file a Statement of Dissolution of a Limited Liability Company with the Iowa Secretary of State. A completed form must contain the name of the LLC and a statement that it is dissolved. The fee for filing a statement of dissolution is $5.

Tax Considerations when dissolving an LLC

Dissolving LLCs should obtain a tax clearance certificate from the Iowa Department of Revenue, as is required of dissolving corporations and LLCs. That said, a dissolving LLC is required to close its tax accounts with the Iowa Department of Revenue. A dissolving LLC in Iowa is required to cancel all of its tax permits and file tax returns through the permit cancellation date. This can be completed online on the State of Iowa’s Department of Revenue website or by completing Iowa’s Business Tax Cancellation form.

While at Drake, Travis worked in the Drake Legal Clinic providing legal services to start-up businesses and non-profit organizations in the Des Moines areas.

Travis joined Hartung Schroeder in March 2020 as a law clerk.  Since that time, he has been working in a number of diverse legal areas including family law, real estate, non-profit and business formation, and litigation support with a focus on real estate and transactional law.

Prior to joining Hartung Schroeder, Travis was a law clerk at Iowa Realty.  In that role, he provided direct support to the company’s general counsel and reviewed purchase agreements and real estate contracts. Travis also has an undergraduate degree from Drake University in business management. Before law school he worked as a business analyst for Farm Bureau Financial Services.

In today’s employment environment, employees are increasingly being asked to sign “non-compete” agreements.  These types of agreements can take many forms and include a range of different restrictive covenants. For example, they can prohibit and/or restrict:  (a) the use of confidential and/or proprietary information; (b) the solicitation of customers; (c) the solicitation of employees; and (d) general competition within a given industry or field.

Employees often sign agreements containing restrictive covenants without placing much thought or consideration of what the long-term implications of these covenants are.  Employees are often excited about the new opportunity before them and cannot envision a future scenario where these covenants may impact their lives.

Employers, on the other hand, often craft restrictive covenants which are overly broad, unduly burdensome, and as such, unlikely to be enforceable if challenged in court.  Employers are justifiably concerned with protecting the company and/or business they have worked hard to develop and grow, which can result in restrictive covenants that are not reasonable in scope and/or duration.

Regardless of which side of the transaction you are on, employee or employer, a basic understanding of how non-compete agreements are treated under Iowa law is necessary.  Iowa courts have consistently held “‘there is no public policy or rule which condemns or holds in disfavor a fair and reasonable non-compete agreement…such a contract is entitled to the same reasonable construction…accorded to business obligations in general.’”  Thrasher v. Grip-Tite Manufacturing Co., Inc., 536 F. Supp. 2d 937, 943 (S.D. Iowa 2008) (quotingCurtis 1000, Inc. v. Youngblade, 878 F. Supp. 1224, 1259 (N.D. Iowa 1995)).  In determining whether a restrictive covenant is enforceable, Iowa courts consider the following factors:

(1)        whether the restriction is reasonably necessary for the protection of the employer’s business;

• whether it is unreasonably restrictive of the employee’s rights; and
• whether it is prejudicial to the public interest.

Revere Transducers, Inc. v. Deere & Co., 595 N.W.2d 751, 761 (Iowa 1999).

As stated by the Iowa Supreme Court, “[e]ssentially, these rules require us to apply a reasonableness standard in maintaining a proper balance between the interests of the employer and the employee.”  Iowa Glass Depot, Inc. v. Jindrich, 338 N.W.2d 376, 381 (Iowa 1983).  Put another way, “the validity of the contract in each case must be determined on its own facts and a reasonable balance must be maintained between the interests of the employer and the employee.”  Baker v. Starkey, 144 N.W.2d 889, 897-898 (Iowa 1966).

Recognizing the long-term impact a non-compete agreement can have, whether you are an employee signing an overly restrictive agreement or an employer whose agreement may not be not enforceable as drafted, it is important to fully understand your rights and responsibilities relative to a non-compete agreement before it is executed.  A quick review by an experienced business attorney can help avoid unexpected consequences and unnecessary expense related to the future enforcement of a non-compete agreement.

ABOUT JON GARNER

Jon’s caseload often includes matters pertaining to business, family law, civil litigation, criminal matters and mediation. Regardless of the type of case, he believes in helping clients find common ground as they work toward resolution. You can read more about him or get in touch here.

It started when J.D. and I first partnered together in 2003, as we sometimes found it difficult because of busy schedules in the office to connect in a way that allowed us to be intentional about managing and growing our firm. We decided to schedule some time away from the office so we could devote more time and focus to the things that mattered. Typically we have golfed, biked, or attended a sporting event together – Denver Broncos games, and more recently, a Toronto Raptors game (head coach Nick Nurse is a friend who has been on previous trips to Colorado with us).

As this retreat approached, we talked about wanting to be more active and do more things outside together, since the weather in Colorado is so nice this time of year. I suggested a week before our trip that I have been wanting to hike a 14’er – one of the 58 mountains in Colorado whose elevation tops 14,000 feet – and J.D. ran with it, finding a mountain called Gray’s Peak that would offer a nice challenge. It was very cold in the morning, requiring many layers, pants, gloves, and hats, but as we as the day wore on and the sun hit us, we eventually were in short sleeves and shorts. The climb was made more difficult because it had snowed significantly five days earlier, and there was a lot of snow and ice that remained on the trail. Walking sticks, which we fashioned from a tree that had fallen, were a must. We made it through, though, enjoying about an hour at the top to simply take in the sights, snap a few pictures, and have a snack, following the three-hour ascent. It took about the same amount of time to come down.

This trip was also fun because we were additionally able to meet up that night with J.D.’s son, who lives and works in Arveda, Colorado, a western suburb of Denver. We also got up close and personal with a momma moose and her baby while on the bike trail in Steamboat Springs. She was very protective!

We were both a little tired that evening, and had a few sore muscles, but there were no major injuries. We both felt a great sense of accomplishment, and felt a little fresh perspective about our place in the world, and ability and desire to make it better through our work.

Most notably, Brad’s expertise in class action lawsuits was recognized in 2015, when the team he led won a $40 million verdict in the largest class action lawsuit ever levied against an Iowa municipality — a case that survived three appeals to the Iowa Supreme Court and a writ for certiorari to the U.S. Supreme Court.

The Super Lawyer designation is a select listing of attorneys that serves as a resource for attorneys and consumers searching for legal counsel. The multiphase selection process involved peer nominations, evaluations, records of personal achievement and independent research. As a Super Lawyer, Brad is considered to be among the top 5% of attorneys in the state. Brad’s other recent honors include his selection as one of America’s Top 100 Attorneys.

An investigation into the accident is ongoing.

“We will share more information as our investigation moves forward, in the hope that no other family ever has to know the pain of losing a child in such a senseless and preventable tragedy,” said Brad Schroeder, counsel for the Klindts.

Brad’s selection to America’s Top 100 Attorneys was by invitation of the prestigious group. The Lifetime Achievement honor recognizes a lifetime of hard work, ethical standards, and community-enriching accomplishments and is only issued once in a lifetime. Less than one-half percent (0.5%) of active attorneys in the United States receive this honor. In addition to this honor, Brad recently was named a 2017 Great Plains Super Lawyer.

“Brad is a highly successful attorney who brings extreme devotion to his alma mater and tremendous talent to the Board of Trustees,” said BVU President Fred Moore. “Brad has served our President’s Advisory Council with distinction, and we know he will bring the same sage advice to the Board.”

Schroeder is a 1994 BVU graduate with a degree in English. He went on to attend law school at the University of Iowa, earning his Juris Doctorate in 1997. In 2003, he and J.D. Hartung established Hartung Schroeder, LLP.

“To be in a position to serve the institution that did so much for me is an honor I could neither imagine nor appreciate as a BVU student many years ago,” said Schroeder. “I thoroughly enjoyed my experience, and I’m thrilled to have the chance to help secure and enhance that opportunity for future generations of BVU students.”

The suit stems from an incident in which a security guard, whose firm is contracted by Water Works, allegedly fired three rounds from a 9mm handgun into Richardson’s 2013 Jeep Wrangler in an attempt to stop Richardson as he was leaving the park after hours.

Learn more at the Des Moines Register (click HERE).

SOURCE: (link)

In David vs. Goliath style, BVU alum Brad Schroeder stands up for what is right against a city municipality… and wins.

Brad Schroeder, Class of 1994, has a relaxed manner that reflects his roots growing up on the family farm near Remsen and is an interesting contrast with the fact he’s a practicing lawyer with an unprecedented win in a class-action lawsuit against the City of Des Moines for charging an unlawful utility franchise tax to MidAmerican Energy customers.

As a lawyer who believes in putting himself in the shoes of others and who strives to help others whenever he can, it’s not surprising to hear his philosophy behind his law firm. “We strive to serve clients as we would want to be served – honestly and aggressively,” said Brad. “It’s a variation of The Golden Rule, but it also adequately captures how we as lawyers should value our relationship with our clients.”

If a client cannot find someone to represent her in a case like this, then who will speak up?

In 2004, a Des Moines resident approached Brad regarding a questionable city fee on her MidAmerican Energy utility bill. Brad pursued the case, filing the initial suit against the City of Des Moines in July 2004, which eventually became a class-action lawsuit that would stretch over nine years and include two appeals by the city to the Iowa Supreme Court, and one appeal to the U.S. Supreme Court, which were all denied. Eventually, the City of Des Moines was ordered by the court to refund just under $40 million to those who paid the fee, and the distribution of refunds are still being determined by an outside claims administrator.

According to Brad, this was a very unusual case. “Few class-action lawsuits ever go to trial, as most get settled at some point, so there is very little case law about them. There are some judges who serve their entire time on the bench and never preside over a class-action suit.”

It truly was unusual for Brad, as he was new to litigating class-action lawsuits and had to weigh numerous aspects before agreeing to take the case. “This definitely fit the category of ‘out of the ordinary’ for me,” said Brad. “I had to really think about if I could get a good result for my client. I knew I would have to hire experts, which gets expensive very quickly. I hadn’t taken a case like this before, so I reached out to a couple of other attorneys who had class-action lawsuit experience, especially with municipalities, to have them involved with the case and to share litigation costs. Teaming up is often the only way to make these larger cases happen.”

According to Brad, partnering with other lawyers on a lawsuit is often done on a case-by-case basis, and is often determined by the size of the litigation involved. “Sometimes it’s a better fit to have more lawyers involved, sharing expenses and sharing workload. I couldn’t have handled this case just by myself, especially during trial times and depositions.”

When the city was given an opportunity to prove their costs in managing the right of way for the utility company, Brad had to hire his own experts to refute the city’s experts, including economists, city financial people, and arborists to testify during a three-week trial. That added to the growing financial costs, but it also added to the growing hours invested in the case by everyone involved. Doing what is right helped keep Brad going as things continued to stretch on. “There were some long days, but you have to latch on to the idea that what is right is right. There are people who are willing to stand up and processes in place to hold city organizations accountable.”

Having a passion for helping others and ensuring clients have the right to legal counsel, it was important to Brad that the plaintiff had access to an attorney who would take her case. “If a client cannot find someone to represent her in a case like this, then who will speak up?” said Brad. “Most people would be in a small claims suit and never get past the front door. With this type of case, if you can’t aggregate the suit, you can’t do it. Class-action sometimes is the only way to right certain wrongs.”

By stepping up to take on a city municipality, Brad felt a little like David versus Goliath, but he felt a duty and responsibility to do his best to ensure his client’s voice was heard. “There is a sense of security for someone like the city, knowing they have a lot of resources at their disposal. They often make things like this go away and exert influence with legislature,” said Brad. “Often, you think you can’t fight city hall. It’s difficult to win, but it’s important that when someone is right in challenging the actions of a municipality or a government entity, that there is an avenue for them to stand up and say, ‘this isn’t right’ and be vindicated. It’s a pretty important part of our process in the U.S. and in many places that just wouldn’t happen.”

Brad credits his time at BVU for preparing him to handle the nine-year class-action case. “In my experience, hard work has always been part of BVU’s identity. The work ethic I picked up at BV definitely came into play during the case. During my time as a student, it was reinforced to work hard, be diligent, and do the right things, and that has worked for me in my career.”

Brad started out at Buena Vista University as a math major, but he became an English major after he really enjoyed a dynamic literature class. An English degree had Brad thinking about his career options, which, for him, led to becoming a lawyer. “It was always in the back of my mind, and there are a lot of things you can do with that profession, so I went for it.”

He attended law school at the University of Iowa, graduating with his Juris Doctorate in 1997. “I found that a liberal arts education was so helpful to the law school experience. It gave me exposure to a lot of different subject matters, and my experience at BVU left me well-prepared for law school.”

After graduating from the University of Iowa, Brad became an associate lawyer at Crawford Law Firm in Des Moines, where he was previously a clerk. During that time, Jerry Crawford was the sole proprietor of the firm, and Brad began to think about starting his own practice, which he did in 2001.

In the spring of 2003, J.D. Hartung, a fellow associate lawyer at Crawford who also left to start his own practice, found office space in the historic Equitable Building in downtown Des Moines and called Brad. They had previously talked about starting a practice together, so Hartung & Schroeder, LLP was formed. By September 2013, the firm had to move to a larger location in the Homestead Building as their practice had grown to include four lawyers and three staff members. Their law firm represents clients in a wide variety of areas, including family law, personal injury cases, business litigation, contract litigation, and some criminal defense work.

“I started out with no clients in 2001, taking it on faith that it would work out. I began to spread the word and do right by people, do good things, and discovered that it does come back to you,” said Brad.

After the recent class-action case, Brad has seen an increase in class-action suits and consumer protection cases coming in their door. “I’ve gotten the reputation of someone who will take on a challenge, but we’re being selective in taking class-action suits,” said Brad. “The best cases are the ones where I have the opportunity to do a good job for someone, and it makes sense for me and for the client. I have to find the balance of what can I do, and yet still keep the doors open.”

With his class-action lawsuit experience, lawyers with litigation in other states have contacted Brad to be their local counsel when they need a lawyer on the ground in Iowa to handle certain matters. “Since it is so rare for a class-action case to make it to trial, other lawyers are always looking for someone who has that experience to work with. I’m glad I can help and share what I have learned,” said Brad.

Brad makes an effort to balance his work with time for his family. He lives in Pleasant Hill with his wife Tammie, a financial advisor with Edward Jones, their son Luke who is 12, and twin girls Lauren and Samantha who are nine.

He also still finds time to be active at BVU. “I’ve been involved with the President’s Advisory Council for a couple of years. It’s a great way to stay plugged in to what’s going on around the campus,” said Brad. “I always try to attend as many alumni events as I can and encourage other people to attend.”