LLC Case Law

“PROPER PURPOSE”

When non-manager members have disputes with managers, the access of the non-managers to LLC records is often a key issue.  The issue is whether the non-member members have a “proper purpose” for obtaining those records.  The post under the link below discusses a Delaware Court of Chancery case about that issue. Here’s the link:  https://delawarechancery.foxrothschild.com/books-and-records-demand-2/chancery-finds-that-mismanagement-exists-warranting-section-220-books-and-records-demand/?utm_source=Fox+Rothschild+-+Delaware+Chancery+Law+Blog&utm_campaign=c83185548b-RSS_EMAIL_CAMPAIGN&utm_medium=email&utm_term=0_86821ff155-c83185548b-70733165

DELAWARE SUPREME COURT DECISION ABOUT IMPLIED COVENANT

The judicial doctrine called the implied contractual covenant of good faith and fair dealing looms over every multi-member LLC operating agreement.  Delaware has a far more extensive body of case law on the Implied Covenant than any other state, and this case law is likely to be persuasive in many other states. The link below […]

TOP 10 2016 BUSINESS DIVORCE CASES

If, like me, you’re a fan of Peter Mahler’s remarkable weekly bog posts on business divorce cases, you’ll find his most recent post, under the link below, a useful review of his past year of posts.  It’s about his choice of the top ten 2016 business divorce cases. Here’s the link: http://www.nybusinessdivorce.com/2016/12/articles/annual-top-10-cases/top-10-business-divorce-cases-2016/

NY CASE ABOUT RIGHT OF SHAREHOLDERS TO INSPECT RECORDS OF CORPORATE SUBSIDIARY–SIGNIFICANCE FOR LLCS

Under the link below is a post by Peter Mahler about a recent decision by a New York appellate court holding that the shareholders of a NY corporation had a common law right to inspect the books and records of a wholly owned subsidiary of that corporation.  Not just in NY but also in other […]

LLC-RELATED DEALS INVOLVING MULTIPLE LEGAL DOCUMENTS

LLC formations often involve multiple documents, especially if these formations involve passive investments that require federal securities compliance documents or if they involve holding company/operating company structures.  The November 14, 2016 decision of the Delaware Supreme Court  under the link below addresses, among other issues, how to determine the relative rank of multiple interrelated LLC […]

WHEN ARE LLCS SUBJECT TO CORPORATE LAW?

I’ve already addressed once in this blog the Delaware case holding that an LLC may be subject to corporate law if its operating agreement so provides; but the subject is so important that I want to state below the title and the first paragraph of a new article about that case that just appeared: 2016-SEP […]

NY CASE ABOUT “PICK YOUR PARTNER” AND RELATED CONCEPTS

The “pick-your-partner” concept and the related concepts of member vs. assignee and management rights vs. LLC interests are central to LLC law both in forming LLCs and in other LLC matters.  The recent NY court decision discussed by Peter Mahler under the link below addresses all of these concepts in deciding a case  involving all […]

DECISION OF NJ SUPREME COURT IN IE TEST

A couple of days ago, I shared a post published that day about the decision of the NJ Supreme Court in the IE Test case, but I received today a post from Peter Mahler about that case.  Peter’s analyses of LLC cases are always excellent, so I’m setting forth the link to his post below.  The case […]

BLOG POST BY TOM RUTLEDGE ABOUT NEW NJ CASE ABOUT EXPULSION OF LLC MEMBER

Under the following link is an excellent summary by Tom Rutledge concerning a very recent NJ Supreme Court case concerning the expulsion of an LLC member under a statutory expulsion provision in the NJ LLC Act: http://kentuckybusinessentitylaw.blogspot.com/2016/08/new-jersey-supreme-court-analyzes.html

DICTA ABOUT THE NATURE OF LLCS AND LLC MANAGEMENT STRUCTURES IN DEL. SUPREME COURT RULING IN OBEID V. HOGAN

By statute or under their operating agreements under most or all U.S. LLC acts, multi-member LLCs can have any of three main management structures: Management by the members (akin to the general partnership management structure); Management by one or more managers (akin to the limited partnership management structure); and Management by a board of directors […]