WHEN EXERCISING A PUT RIGHT WILL MAKE THE LLC INSOLVENT

Under the link below is a post in Peter Mahler’s Business Divorce column about an issue that all LLC lawyers should be aware of.  The author summarizes the subject of the column as follows:

Can an LLC member with a put option–the right to sell his interest back to the LLC–exercise that option when doing so will render the LLC insolvent? This week’s New York Business Divorce post highlights a recent decision by Justice Masley of the New York County Commercial Division considering this issue.

Here’s the link:

https://www.nybusinessdivorce.com/2020/08/articles/uncategorized/departing-llc-members-exercise-your-put-option-before-insolvency-approaches/

MAHLER’S LATEST BUSINESS DIVORCES

Under the link below are four brief discussions about recent LLC decisions in Peter Mahler’s last blog post.  All of them are interesting, but especially the ones about the expulsion of an LLC member and about a member oppression dispute.

https://www.nybusinessdivorce.com/

 

TIPS FOR STARTING UP

Below is a link to an article I wrote for the Concord Monitor providing advice for start-up businesses.

https://www.concordmonitor.com/John-Cunningham-32358675

 

TYPES OF PROVISIONS NORMALLY INCLUDED IN OPERATING AGREEMENTS

There are nine such provisions—namely, provisions that:

    1. Identify the members and managers;
    2. State the members’ duties to make contributions of cash, property or services to the LLC;
    3. State the members’ rights to share in LLC income and losses;
    4. Define the events that will cause the members to cease being members (e.g., death or resignation) and the buy-outs or other consequences of these events;
    5. Define the LLC’s management structure,
    6. Define the members’ voting power;
    7. Require unanimous member votes for admissions of new members;
    8. Impose comprehensive fiduciary duties on the members and managers; and
    9. Provide for dispute resolution by mediation, arbitration or litigation.

WHO ARE THE MEMBERS OF YOUR LLC?

Under the link below is the latest post from Peter Mahler’s excellent blawg entitled “New York Business Divorce.”  The post provides a very useful overview of the special difficulties that can arise in determining whether a particular person is a member of an LLC.  I recommend the post to all LLC lawyers because of this overview and Peter’s excellent discussions of three recent cases on the issue.

Here’s the link:

https://www.nybusinessdivorce.com/2020/07/articles/llcs/disputes-over-member-status-continue-to-roil-the-llc-waters/