Weaponized LLCs

Under the link below is a post by Peter Mahler, the world’s expert (in my opinion) on disputes among LLC members and managers. His post is about a “weaponized” LLC—i.e., one in which the majority have very substantial rights vis a vis the minority under the governing operating agreement. In my experience, “weaponized” LLCs are common; I’ve formed more than a couple myself.

Here’s the link: https://www.nybusinessdivorce.com/2018/09/articles/capital-call/judicial-dissolution-weaponized-llc/

LLC Manager Seeks to Sue His LLC’s Law Firm for Malpractice

LLC managers who want to sue their LLC’s law firm for malpractice, and the LLCs and members, should first read the following case:
Reynolds v. Henderson & Lyman et al., No. 17-1999, 2018 WL 4348013 (7th Cir. Sept. 12, 2018). 

The basic lesson: Manager can’t sue on his own behalf unless the LLC’s law firm is also the manager’s law firm.

Delaware Corporate Case Relevant to LLCs

The controlling members of LLCs often want to obtain waivers from minority members of their statutory appraisal rights.  Under the link below is a useful post about a recent Delaware case addressing the validity of these waivers under Delaware corporate law; but the reasoning and holding in the case is readily applicable to LLCs—and not only in Delaware but also, I suspect, in many other states.

Here’s the link: https://www.pepperlaw.com/publications/contractual-waivers-of-appraisal-rights-declared-valid-under-delaware-law-2018-10-05/

Amendments to Delaware LLC Ac

Delaware has recently made a number of important amendments to the Delaware Limited Liability Company Act.  Most of these amendments became effective on August 1, 2018.  Lawyers who draft operating agreements under the Delaware Act need to have a detailed knowledge of these amendments.

For an excellent overview of them, click here:
https://www.loeb.com/publications-clientalerts-20180907-delawareamendslawregardingdivisionandformationoflimitedliabilitycompanies

Contractarianism Under the Delaware LLC Act

In A&J Capital, Inc. v. Law Office of Krug, C.A. No. 2018-0240-JRS (July 18, 2018), the Delaware Court of Chancery once again emphasized the profoundly contractarian nature of Delaware LLC law and explained the meaning and implication of Delaware LLC contractarianism in substantial detail. For an excellent summary of the case, click here: 
https://www.klgatesdelawaredocket.com/2018/09/chancery-court-enforces-llc-agreement-further-demonstrating-that-llcs-are-creatures-of-contract/