Contract Terms, Breach of Contract, Operating Agreements

Despite Chancery Court Decisions in Recent Years, Agreements Continue to Include Transfer Restrictions That May Not Be Enforceable

Venable LLP on 2/21/2025

Despite recent decisions by the Delaware Court of Chancery, many key corporate documents continue to include restrictions on indirect transfers of equity that may not be enforced if challenged in court....more

New Year, New Law – New Opacity – for LLC Owner Disputes

Farrell Fritz, P.C. on 2/17/2025

New York’s appellate courts are breaking new ground in 2025. Until a month ago, I would have said that “deadlock” most certainly is not enough on its own to dissolve a New York LLC....more

Arbitration Result Can Be “Good”, “Bad” or “Ugly”

Gray Reed on 1/30/2025

The message in RSM Production Corporation v. Gaz du Cameroun SA: According to the federal Fifth Circuit, an arbitration tribunal’s construction of a contract and the arbitration rules governing the dispute “hold, however...more

New York Appellate Court’s Split Decision Involving Delaware LLC Pits “Harsh” Contractarianism Against “Fundamental Fairness”

Farrell Fritz, P.C. on 3/18/2024

Last week, the Manhattan-based Appellate Division, First Department, handed down one of the more intriguing decisions by a New York court I’ve seen in a long time involving a dispute between LLC members....more

The Operating Agreement Controls, Unless Public Policy Says Otherwise

Farrell Fritz, P.C. on 2/28/2022

Two principles often guide courts’ interpretation and enforcement of contracts. First, courts respect parties’ freedom of contract, mostly. So long as an agreement is not illegal or violative of a strong public policy,...more

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

Farrell Fritz, P.C. on 2/4/2020

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

Louisiana Operator’s Bad Faith Does Not Preclude Recovery

Gray Reed on 10/31/2019

Under Louisiana law, does the operator’s bad faith preclude recovery for the non-operator’s breach of a joint operating agreement if the operator caused the non-operator to breach the JOA but did not itself breach?...more

New York Court Compels Arbitration of Commercial Marijuana Dispute

Carlton Fields on 10/22/2019

The defendants moved to compel arbitration of a complex dispute concerning the parties’ investment in medical marijuana companies. The plaintiff claimed that the defendants breached a non-compete agreement and fiduciary...more

The Perils of Indeterminate LLC Membership Interests

Farrell Fritz, P.C. on 10/14/2019

Here we go again — and again and again. On numerous prior occasions I’ve written about judicial dissolution cases and other infighting among LLC members featuring disputes over membership percentages. ...more

Delaware Supreme Court Increases Damages from $1 to $126 Million, Holds Chancery Misapplied Efficient Breach Doctrine

Robins Kaplan LLP on 5/15/2019

On May 2, 2019, Justice Traynor authored a unanimous opinion in which the Supreme Court of Delaware, sitting en banc, reversed a decision by Vice Chancellor Laster of the Delaware Court of Chancery awarding Leaf Invenergy...more

Commercial Division Holds That Agreement That Specifies Dilution as Remedy for Failure to Make Capital Call Prohibits Plaintiff...

Patterson Belknap Webb & Tyler LLP on 4/17/2018

Operating agreements often specify dilution as the remedy for a failure to make a capital contribution. But what if your business partner fails to make a contribution and you’d rather have the capital than an increased...more

Will Someone Please Re-Name the Implied Covenant of Good Faith and Fair Dealing?

Farrell Fritz, P.C. on 2/12/2018

In the annals of business divorce litigation and assorted other disputes between co-owners of closely held business entities, the cause of action for breach of the implied covenant of good faith and fair dealing likely wins...more

Contract Terms › Breach of Contract › Operating Agreements

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