BREACH OF ANTI-WITHDRAWAL PROVISIONS

Peter Mahler has described his latest post in “New York Business Divorce” as follows:

This week’s New York Business Divorce highlights an interesting decision by Commercial Division Justice Andrea Masley addressing claims that the minority members of an LLC breached the operating agreement’s anti-withdrawal provisions by demanding a buyout and bringing a damages suit against the managing member.

Needless to say, the post, although it is based on a recent New York case, is likely to be of interest to LLC lawyers in many jurisdictions.

The link to the post is:  https://www.nybusinessdivorce.com/2020/01/articles/llcs/a-case-of-llc-withdrawal-symptoms/

DOES RESIGNATION OF MEMBER ELIMINATE JUDICIAL DISSOLUTION BASED ON DEADLOCK?

In his latest post, the link to which is below, Peter Mahler poses the issue as follows:

Under what circumstances, if at all, does resignation of one member of a two-member board of directors eliminate “deadlock” and “internal dissention” as available grounds for corporate judicial dissolution?

Although the entity that is the subject of Peter’s post is a corporation, the post is also relevant for the many multi-member LLCs that have a corporate management structure,

Here’s the link:

https://www.nybusinessdivorce.com/2020/01/articles/deadlock/resignation-antidote-for-internal-dissention-and-deadlock/

 

FEDERAL OR STATE COURTS FOR LLC DISSOLUTIONS?

Handling LLC dissolutions is a significant part of the practice of many LLC lawyers.  On the basis of a recent federal trial court case, the new post by Peter Mahler under the link below addresses the strong inclination of federal courts to transfer judicial dissolution cases to state courts.

Here’s the link:

https://www.nybusinessdivorce.com/2020/01/articles/federal-vs-statecourt/another-door-closes-to-federal-court-in-judicial-dissolution-cases/

SHOULD THE OPERATING AGREEMENT OF A MULTI-MEMBER LLC CONTAIN COMPREHENSIVE FIDUCIARY DUTY PROVISIONS?

LLC fiduciary duties are, in essence, the duties of members and managers to act ethically toward the LLC.  Fiduciary duties also represent the “team spirit” of an LLC, which can be critical to its success.  The two main fiduciary duties are the duties of care and loyalty.  Operating agreements should normally spell out the fiduciary duties of the members and managers of a multi-member LLC comprehensively, so that they’ll know how to act as members and managers from Day 1.

WHEN WILL A COURT NOT PERMIT THE DISSOLUTION OF AN LLC?

Peter Mahler’s latest post, under the link below, discusses a recent NY trial court decision on the issue of what plaintiffs must show in order to obtain a court order dissolving their LLC.  The decision is under NY law, but its reasoning will undoubtedly be relevant under the LLC acts of many other states.

Here’s the link:  https://www.nybusinessdivorce.com/2019/12/articles/grounds-for-dissolution/llc-members-petition-to-dissolve-boxing-club-dealt-first-round-ko/