News & Analysis as of

Fiduciary Duty Membership Interest

Farrell Fritz, P.C.

Top 10 Business Divorce Cases of 2023

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Some years are easier than others to select the most significant business divorce cases. In this, the 16th year I’ve published this top-10 list, the task is made especially difficult by a veritable flood of court decisions...more

Cadwalader, Wickersham & Taft LLP

Title (Coverage) Not Available

Two recent decisions concerning title insurance illustrate that an insured’s negligence can result in an exclusion from coverage and that title insurers generally do not owe a fiduciary duty to their insureds....more

Patton Sullivan Brodehl LLP

Derivative Claim Standing: Both Contemporaneous And Continuous Membership Required

When an LLC suffers primary harm that also indirectly harms the LLC’s members, the cause of action generally belongs to the LLC, not its members. Only if the LLC (through its duly authorized management) fails to pursue the...more

Patton Sullivan Brodehl LLP

Portrait of a Mangled Business Divorce

Business divorce can be messy, as reflected by many of the cases covered here at The LLC Jungle. Two issues that frequently arise during the dissolution of an LLC are: 1. the statutory buyout procedure, and 2. claims for...more

Gray Reed

Villareal v. Saenz: Fiduciary Duties Will Go On

Gray Reed on

In Villareal v. Saenz, a district court magistrate judge for the Western District of Texas, San Antonio Division, has recognized that members exiting a limited liability company may continue to hold fiduciary duties despite...more

Winstead PC

Court Affirms The Equitable Forfeiture Of A Manager’s Partnership Interest Due To Breach Of Fiduciary Duty And Discussed...

Winstead PC on

In Michael D. Heatley v. Red Oak 86, L.P. & Charles Johnson, investors in a limited partnership sued the managing member for breach of fiduciary duty. No. 05-18-01083-CV, 2020 Tex. App. LEXIS 6592 (Tex. App.—Dallas August 17,...more

Farrell Fritz, P.C.

Two Entities, Two Outcomes: Withdrawal and the Right to an Accounting

Farrell Fritz, P.C. on

In Jacobs v Cartalemi, now the leading case on the subject of LLC member withdrawal (which our firm had the pleasure of litigating), the Appellate Division – Second Department repeated a well-established principle of law:...more

Farrell Fritz, P.C.

A Trio of Recent Business Divorce Decisions by Manhattan Commercial Division Judges

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The COVID-19 pandemic kept New York’s courthouses dark the last few months, but it didn’t slow down the output of decisions by Commercial Division judges. If anything, the pause of new case filings and non-emergency motions...more

Farrell Fritz, P.C.

LLC Member’s Petition to Dissolve Boxing Club Dealt First Round KO

Farrell Fritz, P.C. on

In the end, it wasn’t much of a fight. The case of Huggins v Scott, decided last month by Justice W. Franc Perry of the Manhattan Supreme Court, illustrates anew the well-nigh insurmountable hurdle faced by a minority...more

Hutchison PLLC

What’s the Difference Between a Public Benefit Corporation and a B Corp Certification?

Hutchison PLLC on

At risk of stating the blindingly obvious, all founders of for-profit companies want their businesses to be profitable. It’s the table stakes for starting and running a business. But what if you wanted to do more?...more

Winstead PC

Heavy is the Head That Wears the Crown: Overcoming Legal & Business Challenges Faced by Majority Owners of Texas Limited Liability...

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The majority owners of private Texas limited liability companies (LLC’s) enjoy a mixed blessing when they also manage their companies. Majority owners have the power to direct their private companies as they deem fit, but...more

Farrell Fritz, P.C.

Does an Inactive Member of a Member-Managed LLC Owe Fiduciary Duties?

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Consider the following hypothetical: The operating agreement of an LLC vests management authority in its two members. ...more

Patton Sullivan Brodehl LLP

LLC Distributions, Charging Orders, and Manager Fiduciary Duties

There are not many published California Court of Appeal opinions providing guidance for LLC managers and members. That’s why it’s an “LLC Jungle” out there. While unpublished opinions are not binding precedent outside of...more

Patton Sullivan Brodehl LLP

Seven Critical Mistakes LLCs Make, and LLC Manager Power Issues

The “Seven Critical Mistakes LLCs Make” Series - This series of posts covers some of the most serious mistakes that LLCs regularly make. Here are...short summaries of each: Choosing the Wrong Business Partners —...more

Farrell Fritz, P.C.

Operating Agreement Defeats Statutory Buyout Rights Upon LLC Member’s Withdrawal

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When the tsunami of LLC enabling statutes swept the U.S. in the late ’80s and early ’90s, including New York in 1994, many included a default rule authorizing as-of-right member withdrawal and payment for the “fair value” of...more

Holland & Knight LLP

Overhaul of Illinois LLC Act Provides Modernization, Increased Flexibility

Holland & Knight LLP on

Significant changes have been made to the Illinois Limited Liability Company Act (the Act) that will impact both existing and new LLCs. These changes, which took effect on July 1, 2017, were designed in part to bring the Act...more

Farrell Fritz, P.C.

For What Does It Profit A Man To Save His Partnership Yet Forfeit His Ability To Pay His Taxes?

Farrell Fritz, P.C. on

According to statistical data released by the IRS earlier this year, the examination rate for partnership tax returns has been increasing significantly over the last couple of years; of course, this includes returns filed by...more

Farrell Fritz, P.C.

Sole Owners of Close Corporation and LLC Discover They're Not So Sole

Farrell Fritz, P.C. on

What makes a shareholder a shareholder? What makes an LLC member a member? The simplicity of the questions belies the difficulties and endlessly unique fact patterns encountered in case after case involving close...more

Butler Snow LLP

The Tennessee Business Court Tackles Privilege Claims

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The Tennessee Business Court has provided additional guidance to commercial litigators concerning internecine legal battles between members of limited liability companies. The Court has determined the fiduciary duties of...more

Butler Snow LLP

The Tennessee Business Court Clarifies Fiduciary Duties of LLC Members

Butler Snow LLP on

In a recent opinion, decided 12/22/15, the Tennessee Business Court clarified the circumstances under which members of a Tennessee limited liability company owe fiduciary duties to one another. In Ewing v. Miller, Case No....more

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