EQUITABLE DISSOLUTIONS

All U.S. LLC statutes provide statutory grounds on the basis of which LLC members may sue in court to dissolve their LLCs.  However, situations can arise in which these grounds do not apply but one or more members of an LLC nevertheless believe that their LLC should be dissolved on “equitable grounds”—i.e., on the basis of fairness.  The post in New York Business Law under the link below addresses the issue of equitable LLC dissolutions under the New York LLC Laws, but the reasoning in the post applies under many other LLC acts.

Here’s the link:  Common-Law and Equitable LLC Dissolution: Going, Going, . . . | New York Business Divorce (nybusinessdivorce.com)

SHOTGUN BUY-SELL AGREEMENT

The new post by Peter Mahler under the link below in Peter’s excellent “NY Business Divorce” blawg addresses possible conflicts between shotgun buy-sell provisions in LLC operating agreements and LLC statutory provisions providing LLC members with the right to petition the courts for LLC dissolutions.

Here’s the link:  https://www.nybusinessdivorce.com/2021/05/articles/deadlock/holes-in-shotgun-buy-sell-agreement-keep-deadlock-dissolution-petition-alive/

UNSIGNED LLC OPERATING AGREEMENTS

The new post in the excellent blawg entitled New York Business Divorce is under the link below.  Its author introduces the post as follows:

In this week’s New York Business Divorce, we tackle two important legal issues for LLC owners. First, the circumstances in which an upon-death membership interest transfer provision in an unsigned, non-final operating agreement may be enforced. Second, whether a membership interest transfer provision in an operating agreement trumps a conflicting bequest in a last will and testament.

Here’s the link:  Unsigned, Non-Final Operating Agreement Trumps Conflicting Testamentary Bequest of LLC Interest | New York Business Divorce (nybusinessdivorce.com)

EXPULSION

The post under the link below, which deals with expulsions of members of multi-member LLCs, is based on New Jersey statutory and case law, but it is relevant to LLC lawyers in most or all other states.

Here’s the link:  https://www.lexology.com/library/detail.aspx?g=15fbd0c3-811d-4f29-9fe2-0fb566581f46&utm_source=Lexology+Daily+Newsfeed&utm_medium=HTML+email+-+Body+-+General+section&utm_campaign=Lexology+subscriber+daily+feed&utm_content=Lexology+Daily+Newsfeed+2021-03-19&utm_term=

PARTNERSHIP V. CORPORATION

Can businesspeople who formed a partnership by oral agreement and who then form corporations that operate through corporations that they form ever claim any continuing partnership benefits, such as real property ownership?  The short answer, as I read Peter Mahler’s latest post in his excellent “Business Divorce” blawg, is this: “Yes, but only by a very specific written agreement.”

Here’s the link:  https://www.nybusinessdivorce.com/2021/03/articles/partnerships/the-oral-partnership-operating-as-a-corporation-is-it-a-partnership-a-corporation-can-it-be-both/

WRITTEN LLC OPERATING AGREEMENT VS. SUBSEQUENT ORAL AGREEMENT

Under the link below is a new post by Peter Mahler relevant to all too many LLC clients.  Peter summarizes the issue in the post as follows:

The interaction between an LLC’s operating agreement and a subsequent, informal deal between the members raises difficult questions surrounding the enforceability of either agreement. In a recently-filed Manhattan Commercial Division case, the Court granted the plaintiff a preliminary injunction, signaling to the parties that the plaintiff was likely to succeed on his claim to enforce the informal deal notwithstanding arguably contrary provisions in the operating agreement. The case reminds us that the formality requirements of an LLC operating agreement may give way to an informal agreement when both LLC members manifest their intent to be bound by the informal agreement

Here is the link:

https://www.nybusinessdivorce.com/2021/02/articles/buyout/a-shotgun-buy-sell-agreement-and-an-email-deal-walk-into-a-beachside-bar/

LIMITED PARTNER VALUATION CASE

A recent decision of the Delaware Court of Chancery, discussed under the link below, addresses an ownership interest issue in a Delaware case that, although it involves the interest in a limited partner of a Delaware limited partnership and addresses Delaware limited partnership Implied Covenant and merger issues, has important implications for Delaware and non-Delaware LLCs that have limited partnership management structures.

Here’s the link:  https://www.nybusinessdivorce.com/2021/03/articles/delaware/general-partner-breached-implied-covenants-in-partnership-agreement-but-plaintiffs-apples-to-oranges-calculation-dooms-bid-for-damages/