Corporate Dissolution

News & Analysis as of

Smooth Sailing: Streamlining Pennsylvania’s Business Entity Laws Changes to Pennsylvania’s Business Entity Laws

On July 1, 2015, Act 172 of 2014, the Association Transactions Act (the “Act”), went into effect, overhauling Pennsylvania’s entity laws contained in Title 15, Corporations and Unincorporated Associations. Derived from the...more

50% Shareholder Denied Say In Defense Of Corporation

If two shareholders each own one half of the outstanding shares of a corporation, one might expect that they would have an equal say in just about everything.  It turns out that in some circumstances they won’t....more

The LLC Operating Agreement - Why Is It Important And What Should It Say?

An LLC is a fairly limitless business form. Generally, an LLC can be and act in any number of ways, tailored to how you want your company to operate. The Kentucky LLC statute provides several gap-filler provisions, but most...more

Privileged No More: Court Finds Attorney-Client Privilege Does Not Survive After “Death” of a Corporation

The attorney-client privilege is one of the most powerful arrows in the quiver of corporate counsel because of the sheer volume of different situations in which it can be used. The privilege comes in handy for corporate...more

Del. Chancery Court Hints that Persons Other than “Managers” May Owe Fiduciary Duties to an LLC

In CMS Investment Holdings, LLC v. Castle, 2015 WL 3894021 (Del., June 23, 2015), the Delaware Court of Chancery hinted that persons other than LLC Managers may, in the future, be found to owe fiduciary duties to an LLC....more

Court Rules Shareholders May Be Sued In De Facto Dissolution

California Corporations Code Section 2011 provides that causes of action against a dissolved corporation, whether arising before or after dissolution, may be enforced against its shareholders if any of the assets of the...more

Do Equities Militate Against Restrictions Barring Petition for Dissolution?

Delaware courts often emphasize the freedom of contract of parties to define their rights, powers, duties, obligations, liabilities and restrictions in a limited liability or operating agreement under the Delaware Limited...more

Amendments to Cypriot Companies Legislation Introduce Examinership

The near collapse of the Cypriot economy has brought about a new generation of legislation which has inter-alia introduced amendments (the Amendments) into Cypriot companies legislation (Cap 113). The Amendments...more

Nevada To Allow Corporations To Stiff Charon

Unsuccessful corporations often fall into an eternal desuetude. Having nothing, no one wants to pay the Secretary of State to complete their dissolution. Because they don’t file the required annual lists and pay the annual...more

In re Carlisle Etcetera LLC, C.A. No. 10280-VCL (Del. Ch. Apr. 30, 2015) (Laster, V.C.)

In this opinion, the Court of Chancery granted in part and denied in part respondent’s motion to dismiss a petition to dissolve Carlisle Etcetera LLC (“Carlisle”). Notably, the Court recognized a cause of action for...more

Hampton v. Turner, C.A. No. 8963-VCN (Del. Ch. Apr. 29, 2015) (Noble, V.C.)

In a letter opinion analyzing how provisions of a limited liability company operating agreement fit together, the Court of Chancery denied defendants’ motion for summary judgment as to plaintiffs’ claim for judicial...more

Court Sorts Out California RULLCA Transition Muddle

Monday, I wrote about Kennedy v. Kennedy, 2015 Cal. App. LEXIS 329 (Apr. 20, 2015).  That post discussed the Court of Appeal’s holding that under the General Corporation Law the dismissal of a cause of action for involuntary...more

Dismissal Of Involuntary Dissolution Action Pulls The Plug On Corporate Buy Out

Sometimes, shareholders are divided on whether a corporation should live or die. In these cases, the California Corporations Code provides an option that allows for the continued existence of a corporation. In any action...more

Attorney-Client Privilege Might Die With Your Company

If you have ever been involved in litigation relating to a defunct company, then you know that problems such as who will serve as the Rule 30(b)(6) representative and who will verify the answers to interrogatories or provide...more

Court Decides Dissolved Corporation “Still Exists”

Some may view dissolution as the final curtain for a corporation and its shareholders.  But unlike mere mortals, a corporation does not strut and fret its hour upon the stage and then is heard no more....more

In Tough Times, Dissolution May Offer the Benefits of Bankruptcy But Without the High Costs

The economy may be showing signs of improvement, but more than 34,000 businesses still filed for bankruptcy in 2014, according to the American Bankruptcy Institute. Studies indicate, however, that many more...more

Law Firm Breakup - What You Need to Know When Dissolving the Entity

Law firm ‘partnerships,’ like other businesses, are similar to a marriage; at some point the parties may decide to part ways and dissolve their partnership. Among the many reasons for the dissolution of a law firm are...more

Delaware Court Grants Petition to Dissolve Joint Ventures

Earlier this month, the Delaware Chancery Court offered further guidance on 8 Del. C. § 273, which establishes a mechanism for the dissolution of a joint venture corporation with two 50 percent stockholders. The Chancery...more

Blog: You Say You Want A Dissolution: An Overview Of The Formal Corporate Wind Down

Winding Down. If a corporation’s board of directors decides that the business needs to be wound down, there are a number of legal paths to consider. ...more

Court Of Chancery Enforces Section 273

This decision reinforces that the joint venture statute for Delaware corporations, Section 273, requires the Court to dissolve the entity upon a deadlock. Absent extraordinary circumstances amounting to a fraud...more

Voluntary Corporate Dissolution in Virginia: An Alternative to Bankruptcy

When financially-distressed small businesses decide to close their doors, less than one-fifth file a voluntary petition in bankruptcy to wind up operations and liquidate. Although legal commentary focuses on bankruptcy as the...more

A Cautionary Tale: Members of a Defunct LLC May Have Liability For Attorney Fees

In CB Richard Ellis Inc. v. Terra Nostra Consultants the California Court of Appeal for the Fourth Appellate District decided an interesting issue concerning the liability of an LLC member for a fee award imposed against the...more

Law Firm “Clawback” Suit Goes to Ninth Circuit

Bankruptcy Judge Dennis Montali in San Francisco said last week that he will allow a direct appeal to the Ninth Circuit from one of his rulings in the bankruptcy of Howrey LLP, skipping an intermediate appeal to the U.S....more

Court Of Appeal Embraces De Facto LLC Dissolution

Under the former Beverly-Killea Limited Liability Company Act, a limited liability company was dissolved upon the first to occur of any of the following three events...more

Imposing The Corporate Death Penalty

In this post published yesterday, UCLA Law Professor Stephen Bainbridge challenges the following statements attributed to Robert F. Kennedy Jr.: I do, however, believe that corporations which deliberately,...more

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