Sweetheart Deal for LLC Lacks Good Judgment

The LLC and our Board agreed to the following settlement regarding the restaurant cards at the December meeting.

• The LLC keeps the money paid to it so far (about $16k from what I can tell)
• The Board stops making future payments
• The LLC removes the expiration from existing cards, so they can be used in the summer when the restaurant re-opens
• The card value is reduced to $102, equating to the amount paid to the LLC divided by the number of payers
• The Board somehow reconciles how much each member has paid and credits any amounts exceeding $102 to member accounts.  This is a tactical hassle, because dues are paid differently by members (i.e. monthly, quarterly, or annually).

So What's My Beef?
There are three problems with this deal: neither the time value of money, nor the risk associated with time are recognized and factored into the settlement, and this deal rewards the LLC after breaching its contractual agreement with the homeowners.

If the restaurant is going to hold onto $16,000 of our money for months, then the value of our cards should be greater than the money we've paid--it's called interest.  Since the LLC is holding $102 of your money for many months, shouldn't your card have a redemption value of, say, $125 by summer?  Paying interest on this high risk investment would at least make us technically whole, but we didn't sign up for bankrolling the restaurant in this way. 

I don't want interest, I want a refund because of the risk associated with time.  The Board implicitly acknowledged this risk when it canceled its standing motion to make advanced payments to the LLC for services.

What if the LLC finally calls it a day and the funding source(s) dry up?  What if the LLC sells the restaurant, as I've heard it is considering?  The former event leads to a total loss of our money.  The latter probably means that the Board will have to relive the nasty logistics of reconciling who's paid how much, and when, in order to make everyone whole.  Doesn't sound like fun to me.

The Board should resolve this issue immediately by recovering money paid or reducing future payments, and then reconciling with the community.  That's it, done.  As outsiders looking in, I'm not the only one thinking this is a sweetheart deal for the LLC--one designed to help them through their cash crunch.  And the annoying part of it is that the LLC gets to keep a great deal of our money ($16,000), and it hasn't even met it's contractual obligation--you know, the one in our covenants that say the restaurant will be open all year except March. And given certain possible outcomes, the Board may pay the price for this faulty decision later by either having to do double-work, or having to stand in front of the community in May and say "oops".

To put this into context, think of a local business you appreciate and  frequent: like a coffee house, dry cleaner, sandwich shop, whatever.  Now imagine they have a sign at the register explaining that they're having a cash flow problem.  But the sign explains that they will be closing their doors for 6 months, and if every customer gives them $100 right now, they can come back in 6 months to begin receiving $100 worth of service/product.

Given that this is a business you appreciate, you'd give them $100, right?  You wouldn't worry about their ability to deliver, or the possibility of them selling the business?   You'd give them $100 because it's not a lot of money to you, and you like them, and you like the way they make your sandwich, or fill your cup, or clean your shirts.  And because you always live your life like this, you've given money to a struggling business before, right?

The restaurant is a business.  Businesses that can not find a formula for creating demand (and profit) eventually fail.  Business is tough and its risky, and many, many of them fail.  Yet we go on.  It's not personal, it's just business.

Is it just me, or does this feel like a poor way for the Board to care for our money?