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Operating Agreements Fiduciary Duty Appeals

Farrell Fritz, P.C.

Demand Futility, Dissolution, and Transfer Restrictions: Spring Blooms Fresh Developments in LLC Litigation

Farrell Fritz, P.C. on

In addition to blooming trees and longer days, spring in New York has ushered in a fresh crop of noteworthy decisions on intra-LLC disputes.  Headliners include a boost to members’ rights to compel an accounting courtesy of...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.

Help Comes From an Unexpected Place in LLC Deadlock Dissolution: The Third Department

Farrell Fritz, P.C. on

Join me if you know this refrain: In New York, deadlock is not an independent ground for LLC dissolution. But… Almost exactly two years ago from today, Peter Mahler published a post titled: “Has the Time Come for...more

Patton Sullivan Brodehl LLP

“Equitable Buyout” as a Remedy for LLC Wrongdoing?

In the world of LLCs, buyouts — where one member sells his/her membership interest to another member or the LLC itself — are commonplace. Buyouts generally fall into one of two categories: contractual — where the...more

Patton Sullivan Brodehl LLP

LLC Operating Agreements: Indemnity, Arbitration, and Equity

LLC operating agreements frequently provide for indemnity to the LLC’s manager. This is consistent with the statutory default rule embodied by California Corporations Code section 17704.08(a), which provides for indemnity...more

Patton Sullivan Brodehl LLP

Diversion of LLC Funds Is Not “Protected Activity” Under California’s Anti-SLAPP Statute

California’s anti-SLAPP statute (Code of Civil Procedure section 425.16) aims to protect defendants from meritless lawsuits designed to chill “protected activity” — i.e., the exercise of rights of petition or free speech on...more

Patton Sullivan Brodehl LLP

Does an LLC Manager’s “Sole Discretion” Eliminate the Implied Covenant of Good Faith and Fair Dealing?

It is no secret that LLC managers enjoy a lot of discretion regarding how they operate the LLC. Members of the LLC often find it difficult to challenge the manager’s decisions on key transactions, investments, and other...more

Patterson Belknap Webb & Tyler LLP

First Department Affirms that an LLC’s Operating Agreement Trumps Delaware Law

A unanimous panel of the Appellate Division, First Department recently affirmed a ruling by the Commercial Division dismissing causes of action against the ACE Group International LLC (“AGI”) brought by the estate of the...more

Farrell Fritz, P.C.

Delaware Contractarian Principles Prevail in Appeal Over Deceased Ace Hotel Founder’s LLC Interest

Farrell Fritz, P.C. on

The sudden death of Alexander Calderwood, the brilliant but troubled co-founder of the Ace brand of hotels, resulted in some fierce litigation between Calderwood’s estate and Calderwood’s LLC co-member over the nature of his...more

Farrell Fritz, P.C.

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

Farrell Fritz, P.C. on

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

Jaburg Wilk

What Are Fiduciary Duties Between Members In An Arizona LLC?

Jaburg Wilk on

A few years I wrote an article named Are There Fiduciary Duties between Members in an Arizona LLC? At the time, there were no published decisions in Arizona on this issue. However, a bankruptcy judge had dismissed my...more

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