Prohibition Against Retroactive Allocations. Notwithstanding anything in this Operating Agreement to the contrary, no Member shall be allocated any loss, credit or income attributable to a period prior to his admission to the Company. In the event that a Member transfers all or a portion of his Company interest, or if there is a reduction in a Member’s Ownership Percentage due to the admission of new Members or otherwise, each Member’s distributive share of Company items of income, loss, credit, etc., shall be determined by taking into account each Member’s varying interests in the Company during the Company’s taxable year. For this purpose, unless the Manager, in its sole discretion, elects to allocate loss, credit or income based on a daily proration methodology, the Manager shall provide for an interim closing of the Company’s books. If the Manager elects to use the daily proration methodology, extraordinary, non-recurring items (including, without limitation, cancellation of indebtedness income) shall be allocated to the persons holding Company interests at the time such extraordinary items occur.
Appears in 7 contracts
Samples: Operating Agreement, Operating Agreement, Operating Agreement
