Operating Agreements, Arbitration Agreements, Contract Terms

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

LLC's Failure to Execute Operating Agreement Opens Legal Trapdoor

DarrowEverett LLP on 1/23/2025

While entity distinctness is a bedrock principle of corporate law, it may often appear redundant and unnecessary for a limited liability company (“LLC”) to sign its own operating agreement. That was likely the thinking of the...more

Is an LLC Bound by its Own Operating Agreement?

Farrell Fritz, P.C. on 11/20/2024

Is a limited liability company a party to and bound by its own operating agreement? Many folks would say, “Yes, of course.” But it turns out the answer varies depending upon the law of the company’s state of...more

Does an Operating Agreement’s Arbitration Clause Apply to a “Purported” LLC Member?

Patton Sullivan Brodehl LLP on 5/23/2022

If an LLC’s Operating Agreement contains a sufficiently broad arbitration clause, most disputes raised by the LLC’s members relating to the LLC will be sent to arbitration (instead of the court system) for resolution. But...more

Who Decides Disputed Valuation Under LLC Agreement’s Buy-Out Provision: Arbitrator or Appraiser?

Farrell Fritz, P.C. on 2/15/2021

It’s not unusual to find buy-out provisions in shareholder and operating agreements that commit the pricing of the buy-out to the “final and binding” determination of one or more appraisers. The same agreements also may...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