ESTATE PLANS VS STOCK TRANSFERS

Peter Mahler introduces his latest NY Business Divorce Blog as follows:

In this week’s New York Business Divorce, we discuss a recent decision serving as a reminder to corporate shareholders planning to bequeath their shares of stock to ensure no contracts prohibit them from doing so, lest they leave behind a very disappointed beneficiary.

The ruling applies equally to LLCs:  In drafting provisions about transfers of members’ membership rights—e.g., upon their death—LLC lawyers should ensure that these provisions are consistent with members’ estate plans.

The link to Peter’s column is as follows:

https://www.nybusinessdivorce.com/2020/11/articles/stock-transfer-restrictions/when-estate-plans-and-stock-transfer-restrictions-collide/

“SHOTGUN” PROVISIONS

The use in LLC operating agreements of provisions called, among other names, “shotgun provisions” or “Texas shootout provisions” to resolve deadlocks between members of a multi-member LLC can sometimes result in a disaster for one of the deadlocked members, as discussed by Peter Mahler, author of the excellent FarrellFritz blawg “New York Business Divorce,” in his latest post.  The link is below:

https://www.nybusinessdivorce.com/2020/11/articles/deadlock/llc-member-pays-the-price-for-not-sticking-to-deadlock-breaking-script/

NAKED EXPULSION PROVISIONS

The post from Peter Mahler under the link below is about a recent NY LLC case upholding the validity of a bare-bones expulsion clause in the operating agreement of a NY multi-member LLC.  The decision is well-reasoned, but in my view, because expulsions are major LLC actions, they should be addressed in detail in operating agreements.

Here’s the link:

https://www.nybusinessdivorce.com/2020/10/articles/expulsion-and-removal/court-enforces-llc-agreements-naked-expulsion-clause/