News & Analysis as of

Limited Liability Company (LLC) Motion to Dismiss Fiduciary Duty

Morris James LLP

Chancery Addresses Claims Arising Out of LLC Dispute Involving Parallel Venture

Morris James LLP on

Largo Legacy Group, LLC v. Evens Charles, C.A. No. 2020-0105-MTZ (Del. Ch. June 30, 2021) - In this LLC dispute, an investor in a hotel development company alleged that the company principals breached the operating...more

Winstead PC

Exiting Member of LLC May Still Owe Fiduciary Duties

Winstead PC on

In Villareal v. Saenz, two co-owners of a limited liability company sued each other regarding conduct surrounding a business divorce. 5-20-CV-00571-OLG-RBF, 2021 U.S. Dist. LEXIS 94183 (W.D. Tex. May 18, 2021). After the...more

Winstead PC

Business Divorce: Exiting Member of LLC May Still Owe Fiduciary Duties

Winstead PC on

In Villareal v. Saenz, two co-owners of a limited liability company sued each other regarding conduct surrounding a business divorce. 5-20-CV-00571-OLG-RBF, 2021 U.S. Dist. LEXIS 94183 (W.D. Tex. May 18, 2021)....more

Gray Reed

Minority Members’ Contractual Blocking Rights Can Result in the Imposition of Fiduciary Duties

Gray Reed on

In Skye Mineral Investors LLC v. DXS Capital (U.S.) Limited, et al., the Delaware Court of Chancery (the “Court”) denied defendants’ motion to dismiss, finding that plaintiffs had sufficiently pled a breach by the members...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

Patterson Belknap Webb & Tyler LLP

Commercial Division Closes Door to Derivative Claims on Behalf of Cancelled LLC

The Commercial Division recently ruled, in a case captioned as Hopkins v. Ackerman, that derivative claims on behalf of an LLC need to be brought before the LLC ceases to exist. ...more

Fox Rothschild LLP

Don’t Fence Me In

Fox Rothschild LLP on

N.C. Business Court Declines to Impose Fiduciary Duties among Sibling Managers of an LLC and Declines to Extend Any “Control Group” Exception to LLCs, but allows Dissolution Claim to Survive, which Creates a Possible Ruling...more

Farrell Fritz, P.C.

Third Time’s Not a Charm in LLC Dissolution Case

Farrell Fritz, P.C. on

As it approaches its sixth anniversary with little sign of letting up, the highly contentious litigation between brothers and business partners NIssim and Avraham Kassab is the gift that keeps on giving, at least to us...more

Patterson Belknap Webb & Tyler LLP

Commercial Division Holds That Fiduciary Duties Limit LLC Majority Members’ Ability to Adopt Amendments Aimed at Freezing Out...

Many LLC operating agreements expressly require the consent of all members to adopt or amend the operating agreement. However, some LLC operating agreements do not contain such a provision, and instead simply require the...more

Farrell Fritz, P.C.

Does This Decision Put the Brakes on Non-Unanimous Amendments to Operating Agreements?

Farrell Fritz, P.C. on

Much digital ink has been spilled on this blog and elsewhere (Tom Rutledge’s terrific article can be read) concerning the ability of LLC controllers to adopt or amend an operating agreement without the consent of all members....more

Faegre Drinker Biddle & Reath LLP

Testing the Limits of Sole Discretion – Delaware Supreme Court Holds That Implied Covenant of Good Faith and Fair Dealing Applied...

The Delaware Supreme Court recently affirmed the dismissal of a co-founder’s claim that a private equity investor and its affiliated managers breached the implied covenant of good faith and fair dealing in connection with the...more

Cadwalader, Wickersham & Taft LLP

Contracting Party Beware: The Implied Covenant Will Not Save You From Your Agreement If You Negotiated Away Your Rights

On February 1, 2018, the Delaware Court of Chancery granted defendants’ motion to dismiss an action brought by minority unitholders of Trumpet Search, LLC (“Trumpet” or the “Company”). The defendants were other unitholders...more

Farrell Fritz, P.C.

LLC’s Purpose Being Achieved? Business Doing Fine? Good Luck Getting Judicial Dissolution

Farrell Fritz, P.C. on

New York’s LLC judicial dissolution statute, Section 702 of the Limited Liability Company Law, provides far more limited grounds to dissolve a business than the Business Corporation Law – a harsh reality for allegedly...more

A&O Shearman

In A Post-Trial Opinion, Delaware Court Of Chancery Dismisses Breach Of Contract And Fiduciary Duty Claims For Lack Of Personal...

A&O Shearman on

On September 1, 2017, Vice Chancellor Tamika Montgomery-Reeves of the Delaware Court of Chancery dismissed claims for breaches of contract and fiduciary duty brought by plaintiffs against a prospective business partner,...more

Patterson Belknap Webb & Tyler LLP

Commercial Division Flags Novel Issue of Reasonable Reliance In LLC Member Battle

In PMC Aviation 2012-1 LLC et al. v. Jet Midwest Group, LLC et al., No. 654047/2015, BL221447 (Sup. Ct. Jun. 21, 2017), Commercial Division Justice Shirley Kornreich denied a motion to dismiss a fraudulent inducement claim by...more

BCLP

Bankruptcy Courts Closing In – Will An Agreement Requiring Unanimous Consent To File For Bankruptcy Be Effective?

BCLP on

We’ve all seen it. The business opportunity looks enticing but is laced with risk about a potential bankruptcy filing down the road. As bankruptcy lawyers we are often asked how deals can be structured to prevent a...more

Pullman & Comley, LLC

Appellate Court Notes

Pullman & Comley, LLC on

Supreme Court Advance Release Opinions: SC19493 - Standard Oil of Connecticut, Inc. v. Administrator, Unemployment Compensation Act - SC19493 Dissent - Standard Oil of Connecticut, Inc. v. Administrator,...more

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