Operating Agreements

News & Analysis as of

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

Member Rights in Kentucky Limited Liability Companies

All members of Kentucky Limited Liability Companies, whether they hold a majority or minority membership interest, have rights under Kentucky statutory and common law, but these rights may be modified, curtailed or extended...more

Massachusetts Federal Court Holds That LLC Operating Agreement Does Not Shield Defendants from Liability for Breaching Their...

A recent decision by Judge F. Dennis Saylor of the U.S. District Court for the District of Massachusetts, Butler v. Moore, C.A. No. 10-10207-FDS U.S. Dist. LEXIS 39416 (D. Mass. Mar. 26, 2015), offers an example of how...more

Court Of Chancery Upholds Arbitration Clause In Breach Of Fiduciary Duty Case

This decision enforces an arbitration clause in an LLC agreement even when the claim asserted a breach of fiduciary duty. While not surprising in itself, the decision may also have broader implications about whether a...more

Operator Can’t Recover Drilling Costs For Affiliate’s Expensive Rig

In Elm Ridge Exploration Co., LLC v. Engle we are reminded of a little-used provision in the 1989 Model Form Operating Agreement. Article VI.D.1 allows the operator to use its own equipment, but his charges may not exceed...more

Reading Before Signing Is Advisable

It's pretty basic that your clients should read the agreements that they sign before they sign them. Or you should at least explain to your client the key provisions in what they are going to sign, if they are not going to...more

In a Business Owners Agreement, Should All Owners Be Equal?

Good business planning involves owners of the company developing and entering into a shareholders agreement, operating agreement or partnership agreement (owners agreement). A good owners agreement will allow the owners to...more

Downturn in the Oil and Gas Industry: It’s Time to Perfect Your Liens

Joint operations in the oil and gas industry long have been one of the conventional ways to reduce and spread the economic risks associated with exploration, drilling and production of crude oil and natural gas. With the...more

How Do I Get Out of this Practice?

For years the goal of many young doctors was to gain ownership in their medical practice entity. For many, when the time came for them to “make partner,” they signed on the dotted line without fully understanding the legal...more

Court Ruling Confirms that SDVOSB Contractors Possess Procedural Due Process Rights Against Adverse Eligibility Determinations

The U.S. Department of Veteran Affair's ("VA") Center for Veterans Enterprise (“CVE”) has a tough and sometimes thankless job. Its role is to serve as a “gatekeeper” for VA contracting programs for service-disabled,...more

District Court Weighs in on Level of Integration Required to Shield Health Care Collaborations from Section 1 Scrutiny

In Medical Center at Elizabeth Place v. Premier Health Partners et. al, Case No. 12-cv-26 (S.D. Oh. Oct. 20, 2014), the Southern District of Ohio held that previously-competing health care systems who join together in a...more

Ohio District Court Deems Hospital Alliance a Single Entity Incapable of Conspiring Under the Antitrust Laws

On October 21, 2014, the U.S. District Court for the Southern District of Ohio granted Defendants’ motion for summary judgment, holding that Premier Health Partners (“Premier”) and its affiliate hospitals, Atrium Health...more

Orrick's Financial Industry Week in Review

EBA Consults on RTS on Contractual Recognition of Write-Down and Conversion Powers under BRRD - On November 5, the European Banking Authority (EBA) published a consultation paper on draft regulatory technical standards...more

Eighty Five Thousand Reasons Not To Represent An LLC Without The Approval Of A Majority Of The Members (and one Other Thing)

Be sure that an LLC member has the authority to hire you before accepting the representation of the LLC in a suit by or against another LLC member. That authorization generally requires a majority of the interest of the...more

What Every Business Should Know About Keeping Its Corporate House in Order

In This Presentation: - Corporate Records Housekeeping - Protecting Assets – Vis A Vis Employees And Others (Trade Secrets, Confidentiality And Non-Competition Agreements) - Protecting Assets – ...more

Another Bankruptcy Proofing Strategy Bites the Dust, or Does It?

In an effort to minimize the risk of loss in connection with a loan default, lenders often employ creative means to make it difficult, if not impossible, for a borrower to file bankruptcy....more

Who Runs my Joint Venture?

One of the primary purposes of a written partnership (or limited liability company (LLC) operating) agreement is to establish rights and obligations for management. In a general partnership or joint venture, any partner or...more

Is The LLC A Party To Its Own Operating Agreement?

Is an LLC a party to its own operating agreement? California’s new Revised Uniform Limited Liability Company Act (RULLCA) defines “operating agreement” as “the agreement, whether or not referred to as an operating...more

The Florida Revised Limited Liability Company Act Action may be required by Florida LLCs by December 31, 2014

In 2013, the Florida Legislature adopted the Revised Florida Limited Liability Act. The Revised LLC Act restates the Florida laws governing LLCs in an entirely new Chapter 605, which succeeds the prior LLC Act found in...more

Venture Capital Firm Liable For "Aiding And Abetting" Breach Of Fiduciary Duty

A recent case in the California Court of Appeals underscores the dangers that await venture capital firms brave (or foolish) enough to fund companies in the midst of internal disputes. In American Master Lease LLC v Idanta...more

Tenth Circuit Affirms Denial Of Motion To Compel Arbitration Based On Unsigned Agreement

The Tenth Circuit recently affirmed a district court’s denial of a motion to compel arbitration in a securities fraud lawsuit brought by two investors in a company. The basis for the motion to compel was an arbitration...more

Can You Replace Your Manager? Delaware Case Emphasizes the Importance of Carefully Considering LLC Agreement Provisions

Common sense might lead one to expect that a controlling stakeholder has the power to replace the manager of a limited liability company (LLC), but this might not be the case when the underlying LLC agreement provides...more

Homebuilder Series Webinar: Joint Ventures Solutions, Steve Lear [Video]

This is the second in a series of in-depth webinar discussions that cover a range of legal and business issues affecting the homebuilder industry. Homebuilders frequently use joint ventures as a means to finance...more

It Depends On The Meaning Of The Word "With"

The contractual interpretation issue before the Business Court in Schultheis v. Hatteras Capital Investment Management, LLC, 2014 NCBC 23, turned on the meaning of the word "with." Well, actually on the phrase "entering into...more

Implications of the New California LLC Act

On January 1, 2014, a new law governing limited liability companies (“LLCs”) went into effect in California. The California Revised Uniform Limited Liability Company Act (“RULLCA”)1 superseded in its entirety the prior...more

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