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.
In his excellent “NY Business Divorce” blog, Peter Mahler has just published an excellent post about the above topic under the following link:
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.
The new post under the link below, from Peter Mahler in his excellent “NY Business Divorce” blawg, is one of the best discussions I’ve seen concerning member expulsion provisions in LLC operating agreements.
Here’s the link:
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.
The link below is to a new post in NY Business Divorce, Peter Mahler’s excellent blog, about a recent NY case which the court granted equitable dissolution to certain oppressed shareholders. The case may well be equally relevant to oppressed LLC members, and not only in NY.
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=
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.”
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:
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/