Fiduciary Duties

IMPLIED COVENANT

Lawyer shouldn’t draft operating agreements for multi-member LLCs unless they have a solid understanding of the implied contractual covenant of good faith and fair dealing. Below are a cite and the first paragraph of a good new article on the implied contractual covenant of good faith and fair dealing. 58 B.C. L. Rev. E-Supplement 1 […]

PROFESSIONAL ENTITY BREAKUPS

The question addressed in the case discussed by Peter Mahler in his most recent “Business Divorce” post is, in Peter’s own words (below in quotes): “Does a shareholder have a fiduciary duty not to exercise a contractual right under the shareholders agreement to resign and demand a buy-out of his shares by the financially distressed […]

FIDUCIARY DUTIES OF SHAREHOLDERS

A basic question under every LLC act is whether, under that act, the members as such have fiduciary duties (i) to the other members; (ii) to the LLC itself; or (iii) to both the other shareholders and the LLC.  The post under the link below discusses a case addressing only the fiduciary duties of corporate […]

BUSINESS JUDGMENT RULE

The post under the link below discusses a very recent Delaware Court of Chancery decision about the business judgment rule.  LLC lawyers need to have a detailed understanding of this rule because, among other things, it should often be included with the duty of care provisions in operating agreements for multi-member LLCs. Here’s the link: […]

DELAWARE SUPREME COURT CASE ABOUT FIDUCIARY DUTIES

The post under the link below discusses a December 19, 2016 decision by the Delaware Supreme Court affirming the validity of Delaware limited partnership  agreement provisions waiving limited partners’ fiduciary rights.  The decision effectively applies also to all other Delaware “alternative entities,” including LLCs.   It’s often useful for LLC lawyers to provide for waivers of […]

DELAWARE CASE CONCERNING THE FIDUCIARY DUTY OF DISCLOSURE

The duty of entity managers to disclose critical information to entity owners concerning their entities is a key component of the duty of loyalty under the law of Delaware and other states.  This duty is the central focus of the January 4, 2017 decision by the Delaware Chancery Court discussed in the post under the […]

CHANGES IN FIDUCIARY PROVISIONS OF CALIFORNIA LLC ACT

Under the link below is an excellent new post about recent changes in the fiduciary provisions of the California LLC Act.  The post will, of course, be of interest above all  to California LLC lawyers, but it will also be useful to non-California LLC lawyers about fiduciary issues critically important to LLC formations under all […]

TAKING LLCS PUBLIC

Few of us are likely ever to represent LLCs that have a realistic chance of going public.  However, for those LLCs that do, the article under the link below outlines a potentially very useful structure for an LLC public offering. Here is the link: http://taxprof.typepad.com/taxprof_blog/2016/10/polsky-rosenzweigthe-up-c-revolution.html Here is a link that will enable you to open […]

ARTICLE ON BUSINESS ORGANIZATION FIDUCIARY LAW

Bill Callison is a leading expert on LLC law and tax.  Below is a link to an article he’s just published on U.S. business organization fiduciary law.   Fiduciary issues are, of course, central to formations of multi-member LLCs (and even to formations of single-member LLCs that will have non-member managers).  I haven’t read Bill’s article […]

LAW JOURNAL ARTICLE ABOUT LLCS AND FIDUCIARY DUTIES

Below are the citation and the table of contents of a new law journal article about LLCs and fiduciary duties: 16 Nev. L.J. 1085 Nevada Law Journal Summer 2016 Article CONTRACTING OUT OF FIDUCIARY DUTIES IN LLCS: DELAWARE WILL LEAD, BUT WILL ANYONE FOLLOW? Justin Pace Copyright (c) 2016 Nevada Law Journal; H. Justin Pace […]