News & Analysis as of

Operating Agreements Breach of Contract Business Divorce

Patton Sullivan Brodehl LLP

LLCs Can Assert Offensive Claims Against Members

In “business divorce” litigation involving LLCs, it is common to see a disgruntled LLC member asserting claims against the LLC’s manager. Depending on the type of harm alleged, those claims might be asserted directly (by the...more

Farrell Fritz, P.C.

LLC Member States Direct Claims Arising from Machiavellian Manager’s Tactical Bankruptcy Petition

Farrell Fritz, P.C. on

“There is only going to be one winner here, and it’s not going to be you—give in while there is something still left in it for you,” said one LLC member to the other. With co-owners like that, who needs enemies?...more

Farrell Fritz, P.C.

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

Farrell Fritz, P.C. on

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

Farrell Fritz, P.C.

Recent Decisions Enforce LLC Member’s Right of First Refusal, Restrict Partnership Accounting, and Allow Damages Claim for Breach...

Farrell Fritz, P.C. on

Someday, perhaps, I’ll find the comedic inspiration to come up with a joke that begins, “An LLC, a partnership, and a close corporation walk into a bar . . ..” Until then, I’ll have to satisfy myself with writing about an...more

Robson & Robson, P.C.

Civil RICO In Pennsylvania Business Divorce Cases: A Hammer Without A Nail?

Robson & Robson, P.C. on

When legal disputes between owners of closely held companies turn the corner past “Let’s resolve this issue without litigation” and head toward “See you in court,” the owners and their lawyers typically begin jockeying for...more

Farrell Fritz, P.C.

But What of the Equitable Accounting?

Farrell Fritz, P.C. on

I can’t say what the number is, but my own experience tells me that a significant percentage of lawsuits by a minority owner of a closely-held company against those in control of the company include a demand for an...more

Farrell Fritz, P.C.

The Operating Agreement Controls, Unless Public Policy Says Otherwise

Farrell Fritz, P.C. on

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

Farrell Fritz, P.C.

Court Enjoins Dilution of Brewing Company LLC Membership Interest

Farrell Fritz, P.C. on

Most folks associate beer with pleasure. Many craft brewers will tell you they went into business for that reason: to make themselves and others happy (and, oh yeah, make money). ...more

Snell & Wilmer

Delaware Court of Chancery: Deadlock Can be Genuine Even When Unilaterally Orchestrated

Snell & Wilmer on

A Delaware Court of Chancery case decided earlier this year provides some useful guidance on the interpretation of LLC agreements and what constitutes a “deadlock” under Delaware law. The case, Mehra v. Teller, involved a...more

Farrell Fritz, P.C.

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

Farrell Fritz, P.C. on

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

Farrell Fritz, P.C.

A Case of LLC Withdrawal Symptoms

Farrell Fritz, P.C. on

I was especially drawn to the case I’m about to introduce involving LLC member withdrawal, owing to the Jacobs v Cartalemi case that I litigated to a successful conclusion about two years ago, also involving member...more

Farrell Fritz, P.C.

The Perils of Indeterminate LLC Membership Interests

Farrell Fritz, P.C. on

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

Farrell Fritz, P.C.

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

Farrell Fritz, P.C. on

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

Patterson Belknap Webb & Tyler LLP

Special Proceeding Seeking a Judicial Decree to Dissolve an LLC

In Advanced 23, LLC v. Chambers House Partners, LLC, No. 650025/2016, 2017 BL 462831 (NY. Sup. Ct. Dec. 15, 2017), Justice Saliann Scarpulla of the Commercial Division ruled that Advanced 23, LLC (“Advanced”) and David...more

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