Category: LLC Cases

THE “DIRECT VS. DERIVATIVE” PROBLEM

The attached new New York Business Divorce post addresses a “direct vs. derivative” problem that arises in litigation by LLC members against their LLCs or their managers or other members in many states.   The New Hampshire LLC Act is drafted to prevent the problem, and I suspect there are at least a few other acts that do the same.   But New York law—addressed in the post—is likely to be useful in many states besides New York.

Singin’ the Derivative Plaintiff Blues

 

TOP 10 BUSINESS DIVORCE CASES OF 2021

In the link below, the wonderful law blawg called NY Business Divorce lists what the authors of the blawg view as the top ten business divorce cases of 2021.  This list by itself may be useful to you, but I should add that the blawg website also has a superb index that makes it easy to find cases on specific LLC and closely held corporation issues important to practitioners.

Top 10 Business Divorce Cases of 2021

LLC LITIGATION INVOLVING OWNERSHIP ISSUES

Under the link below is yet another excellent post in the law blawg “NY Business Divorce” about litigation involving issues as to who were the real owners of the LLCs in question and what was the real ownership percentage of each in each LLC.  In my experience, these issues arise constantly.  The only solution to these issues is, of course, crystal-clear drafting.

Here’s the link:

Disguised Agreements and Dissolution – New York Business Divorce (nybusinessdivorce.com)

BUSINESS SHORTS: BUSINESS DIVORCE CASES FROM ACROSS THE COUNTRY

The link below is to a new post in the “NY Business Divorce” blawg that summarizes ten important cases involving closely held companies (mainly LLCs) that have been decided during the past year, and the post provides links to the cases themselves.  In my view, every LLC lawyer, regardless of the jurisdiction in which he or she practices, should have at least a basic knowledge of these ten cases.

Summer Shorts: Business Divorce Cases From Across the Country

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/

LLC MERGERS VS. CORPORATE MERGERS

The post in Peter Mahler’s “New York Business Divorce” under the link below will be of interest not only to LLC lawyers in New York but also in all other states.  Peter introduces the post as follows:

This week’s New York Business Divorce is a follow-up to last week’s article, a piece about the enormously important appellate decision in the Farro case, the first to carefully consider the correct meaning and interpretation of New York’s LLC merger statute and its relation to the analogous corporation merger statute. In this week’s article, learn about the rest of the story in the Farro litigation, addressed in two companion appellate decisions issued the same day. Continue Reading…

The link to the post is as follows:  https://www.nybusinessdivorce.com/2021/01/articles/expulsion-and-removal/the-farro-litigation-the-rest-of-the-story/

DELAWARE LLCS AND THE ADVANCEMENT OF LEGAL FEES

For those of you who (like me) follow Delaware Court of Chancery decisions about LLC issues, below is a link to a Shearman & Sterling post entitled “Delaware Chancery Court Finds Limited Liability Companies Can Be Liable For Advancement To Members, Even Under Delaware Corporate Law.”

Here’s the link:

https://www.lexology.com/library/detail.aspx?g=e1b45597-6430-44bf-b8b2-5e68a039aa27&utm_source=lexology+daily+newsfeed&utm_medium=html+email+-+body+-+general+section&utm_campaign=lexology+subscriber+daily+feed&utm_content=lexology+daily+newsfeed+2019-05-08&utm_term