LLC member wants out but our operating agreement doesn't specify buyout terms - what happens now?

Sorry for the wall of text. We have a 3-member LLC (Texas) formed in 2022. One member (33.33% ownership) now wants to leave the company. Our operating agreement is pretty basic - just says members can't transfer their interest without consent of other members, but doesn't say anything about buyout price, valuation method, or payment terms.

The departing member is demanding we buy him out at "fair market value" immediately. The other two of us think fair market value is way less than what he's claiming, and we don't have the cash to pay him out all at once anyway.

What happens when the operating agreement is silent on this? Who decides the price? Can we force installment payments?

Smart move on the access. One more thing - make sure you have a mediation clause in your buyout agreement. If he accepts your offer but disputes arise during the 18-month payment period supposedly, mediation is way cheaper than litigation lol.

And for anyone reading this thread: THIS is why you need a comprehensive operating agreement from day one. A good operating agreement would have:

• Defined valuation method (formula or appraisal process)
• Payment terms (lump sum vs. installments)
• Right of first refusal for remaining members
• Drag-along and tag-along rights
• Dispute resolution procedures

Costs $1-2K upfront to have an attorney draft it properly. Could save you $20-50K in disputes later.