News & Analysis as of

Limited Liability Company (LLC) Public Policy

Farrell Fritz, P.C.

Anti-Dissolution Provisions and Public Policy

Farrell Fritz, P.C. on

In Congel v Malfitano, New York’s highest court wrote that business partners are free to include in partnership contracts practically “any agreement they wish,” including about “the means by which a partnership will dissolve,...more

Arnall Golden Gregory LLP

Restructuring Roundup - October 2021

Industry News - Washington Prime Group Announces Successful Completion of Financial Restructuring...   J&J is using a bankruptcy maneuver to block lawsuits over baby powder cancer claims...more

Jones Day

Delaware Bankruptcy Court Rules that Bankruptcy Blocking Right in Debtor's Corporate Charter Violates Federal Public Policy

Jones Day on

Courts sometimes disagree over whether provisions in a borrower's organizational documents designed to prevent the borrower from filing for bankruptcy are enforceable as a matter of federal public policy or applicable state...more

Mintz - Bankruptcy & Restructuring Viewpoints

Bankruptcy Restrictions in Operating Agreement Held Unenforceable

In In Re Lexington Hospitality Group, LLC, the United States Bankruptcy Court for the Eastern District of Kentucky thwarted a lender’s efforts to control whether its borrower could file bankruptcy. As a condition to the loan,...more

McCarter & English, LLP

Delaware Law Updates – Freedom of Contract in LLC Structure Is Not Absolute Where Parties Seek Bankruptcy Relief

In re Intervention Energy Holdings, LLC, Case No. 16-11247 (D. Del. June 3, 2016), the Bankruptcy Court for the District of Delaware dealt with the issue of whether a Delaware LLC lacked authority to file a Chapter 11...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

Sheppard Mullin Richter & Hampton LLP

Lenders Cannot Prevent Borrowers From Filing Bankruptcy By Owning Minority Equity With Veto Power Over Borrower’s Decision To File...

In a recent decision, the U.S. Bankruptcy Court for the District of Delaware refused to enforce a provision in the debtor’s LLC operating agreement requiring a unanimous vote of the debtor’s members to authorize the debtor to...more

A&O Shearman

Delaware Bankruptcy Court Invalidates on Public Policy Grounds a “Golden Share” Provision in LLC Agreement Designed to Limit LLC’s...

A&O Shearman on

In a June 3, 2016 decision, the United States Bankruptcy Court for the District of Delaware (“the Bankruptcy Court”) invalidated, on federal public policy grounds, a provision in the debtor-LLC’s operating agreement that it...more

Burr & Forman

Intervention Energy: The Case Where the Golden Share Lost its Shine

Burr & Forman on

In connection with out-of-court restructurings, workouts and forbearance agreements, creditors often seek to include provisions that purport to limit the ability of a debtor to file for bankruptcy relief. However, bankruptcy...more

Mintz - Employment, Labor & Benefits...

More on California Non-Competes – But This Time from Delaware

When it comes to California non-competes, you can never get enough clarity.  And when that clarity comes from a Delaware Chancery Court, it adds a utility element that our corporate brethren appreciate....more

Allen Matkins

Court Of Chancery Rejects Delaware Choice Of Law

Allen Matkins on

The public policies of California and Delaware both espouse freedom. Ironically, the freedoms that they espouse are antithetical to each other. California embraces the freedom of people to pursue any lawful and employment...more

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