News & Analysis as of

Bad Faith Limited Liability Company (LLC)

Holland & Knight LLP

Delaware Bankruptcy Court Grants Creditors' Committee of Debtor LLC Derivative Standing

Holland & Knight LLP on

In a recent opinion, In re Pack Liquidating, LLC (Pack Liquidating), the U.S. Bankruptcy Court for the District of Delaware held that under Official Committee of Unsecured Creditors of Cybergenics Corp. v. Chinery...more

Patton Sullivan Brodehl LLP

Alter Ego — No Single Factor is Determinative

Alter ego liability is again the flavor of the day... As previously covered, the alter ego doctrine allows a court to disregard a corporate entity (including LLCs) and hold the individual owners liable for claims against...more

Farrell Fritz, P.C.

“Intentional” Breach of Fiduciary Duty Defeats Operating Agreement’s Exculpatory Clause

Farrell Fritz, P.C. on

Last week, Peter Mahler blogged about a recent decision holding that a minority shareholder’s claim against its majority co-owners for breach of fiduciary duty in connection with a sale of the business to a third party...more

Patton Sullivan Brodehl LLP

LLC Managers: No Immunity for Bad Faith Conduct

Under the “default” rules of most limited liability company laws, including California’s Revised Uniform Limited Liability Company Act, LLC managers owe fiduciary duties to the LLC and its members.  Those default fiduciary...more

Stinson - Corporate & Securities Law Blog

“Sole Discretion” Language in LLC Agreement does not Eliminate Fiduciary Duties

The Delaware Court of Chancery considered a number of issues in Skye Mineral Investors, LLC et al v DXS Capital (U.S.) Limited et al.  The dispute was among members of a Delaware limited liability company, Skye Mineral...more

Farrell Fritz, P.C.

The Curious Case of the Expelled LLC Member Bound by Operating Agreement He Never Signed

Farrell Fritz, P.C. on

The case of Shapiro v Ettenson ranks as one of the more consequential ones in the realm of New York’s LLC jurisprudence....more

Farrell Fritz, P.C.

Top Ten Business Divorce Cases of 2019

Farrell Fritz, P.C. on

This year’s list offers a good mix of business entities: six involve disputes among LLC members, two involve law firms organized as limited liability partnerships, one involves an accounting firm organized as a professional...more

Farrell Fritz, P.C.

The Bad-Faith Petitioner Defense Makes Successful Debut in LLC Dissolution Case

Farrell Fritz, P.C. on

What’s become known as the bad-faith petitioner defense in judicial dissolution proceedings first emerged in Matter of Kemp & Beatley, 64 NY2d 63 [1984]...more

Patton Sullivan Brodehl LLP

LLC Distributions, Charging Orders, and Manager Fiduciary Duties

There are not many published California Court of Appeal opinions providing guidance for LLC managers and members. That’s why it’s an “LLC Jungle” out there. While unpublished opinions are not binding precedent outside of...more

Patterson Belknap Webb & Tyler LLP

Top 10 New York Commercial Division Cases and Developments of 2017

In 2017, the New York Commercial Division continued to implement new rules and refine existing rules in order to streamline litigation in the court. The year also saw some key decisions by the Commercial Division as well as...more

Butler Snow LLP

Tennessee Business Court Accepts “Bad Faith Defense” to Dissolution of Dysfunctional LLCs

Butler Snow LLP on

The Tennessee Business Court, a pilot project (1) (2) (3), has continued dealing with the resolution of business disputes, many of which involve fractious arguments between LLC members. Some disgruntled members pursue damages...more

Morris James LLP

Chancery Dismisses Complaint for Failure to Allege Noncompliance

Morris James LLP on

A principal difference between alternative entities and corporations under Delaware law is the ability in the former to modify or eliminate fiduciary duties. A Delaware court is required by statute to give effect to the...more

Troutman Pepper

Real Estate Cases: Bad Faith Filing Does Not Necessarily Mean That You Are A Bad Person

Troutman Pepper on

In re Sterling Bluff Investors, LLC, 515 B.R. 902 (Bankr. S.D. Ga. 2014) – A mortgagee moved to dismiss a real estate debtor’s chapter 11 case, or in the alternative for relief from the automatic stay. It contended...more

Foley & Lardner LLP

Legislature Rewrites Florida LLC Law

Foley & Lardner LLP on

The 2013 Florida Legislature made several important changes to the law governing Florida limited liability companies (LLCs). The new law was based primarily on the Revised Uniform Limited Liability Company Act as amended in...more

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