Operating Agreements

TEXAS SHOOT-OUT PROVISIONS

Texas shoot-out provisions, also known as “shotgun” provisions, are very common in the operating agreements of multi-member LLCs, but they are often inappropriate.  Under the link below, in a post by Peter Mahler, is the best short discussion of these provisions I’ve ever read. Aim Carefully Before Pulling Trigger on Shotgun Buy-Sell Agreement

AMENDING LLC OPERATING AGREEMENTS

Under the link below is another fine post by Peter Mahler about an issue that, in one form or another, often arises in LLC practice—namely, an issue about the terms governing the amendment of an operating agreement. Here’s the link: http://www.nybusinessdivorce.com/2017/05/articles/llcs/delaware-ruling-highlights-difference-new-york-amending-llc-agreements/

FORUM SELECTION CLAUSE IN LLC OPERATING AGREEMENT

LLC operating agreements for multi-member LLCs often contain forum selection clauses, and these clauses sometimes involve carve-outs. All such clauses must be carefully drafted. The post under the link below deals with an LLC operating agreement’s forum-selection clause and carve-out, but the carve-out wasn’t explicit enough and thus was held to be ineffective. The lesson […]

DELAWARE LLCS

Set forth below are the citation to an article about Delaware LLC indemnification and advancement provisions and the first paragraph of the article. Now is the Time to Revisit the Advancement and Indemnification Provisions of Delaware LLC Agreements By Kenneth A. Gerasimovich, Greenberg Traurig, LLP Imagine setting off on an exciting venture with a new business […]

RECENT NY APPELLATE DECISION

The decision discussed in the post under the link below holds, in essence, that under New York LLC law, a minority member can be bound by a written operating agreement even if the member never did (and never would) sign it.  I’m sure some other states have LLC act provisions generally similarly to the provisions […]

LLCS AND FREEZE-OUT MERGERS

Under the link below is another excellent new post about a recent New York case involving an LLC merger freezing out a minority member.  The decision in the case was based on the plain language of the governing operating agreement, and, in particular, on the fact that the operating agreement permitted a majority of the […]

INDEMNIFICATION AND ADVANCEMENT PROVISIONS IN DELAWARE LLC AGREEMENTS

The post under the link below concerns indemnification and advancement provisions in Delaware LLC agreements under the recent Delaware Court of Chancery decision in Harrison v. Quivus Systems, C.A. 12084-VCMR.   In my view, the court’s rationale in the Harrison case is likely to be persuasive under the LLC acts of most or all non-Delaware states. […]

DELAWARE CASE ABOUT ADVANCEMENTS

Any operating agreement for a relatively sophisticated or substantial business should contain a provision providing for the advancement of litigation expenses to managers who are sued because of their activities or omissions as managers.  The post under the link below discusses a recent Delaware case about contested advancement provisions in the operating agreement of a […]

GOOD FAITH VS. BOARD DISCRETION IN OPERATING AGREEMENTS; DEADLINE PROVISIONS IN OPERATING AGREEMENTS

Operating agreements and related membership repurchase agreements often contain both (i) management discretion provisions and (ii) provisions requiring management to act in good faith.  And of course the contractual law of most or all jurisdictions imposes on LLC members and managers an implied contractual covenant of good faith and fair dealing.  These agreements also often […]

NON-COMPETES

http://www.jdsupra.com/legalnews/navigating-non-compete-and-other-key-75446/ LLC operating agreements often need to include non-competition provision applicables to managers or members, and LLC lawyers need to have at least a basic understanding of non-competition law in order to ensure that when persons become managers or members of LLCs these lawyers are forming, this won’t create problems under non-compete agreements of these […]