A prior LLC Jungle post covered the Court of Appeal’s seminal opinion in the Jarvis v. Jarvis case here: Why Having “Co-Managers” for Your LLC is a Terrible Idea. In the Jarvis case, the Court of Appeal affirmed the...more
7/22/2025
/ Appeals ,
Business Disputes ,
Business Entities ,
Business Litigation ,
Business Ownership ,
Corporate Governance ,
Dispute Resolution ,
Divorce ,
Fiduciary Duty ,
Limited Liability Company (LLC) ,
Litigation Strategies ,
Operating Agreements
One of the most important rights owned by LLC members is the right to inspect the LLC’s books and records. For an overview of LLC books and records requests, see the prior LLC Jungle post: Why LLC Managers Should Take Member...more
In a popular TV series (The Wire), a well-known quote is: “You come at the king, you best not miss.” The idea is that if you’re taking the risk of attacking someone at the top, you better not miss your shot....more
In “business divorce” litigation involving LLCs, it is common to see a disgruntled LLC member asserting claims against the LLC’s manager. Depending on the type of harm alleged, those claims might be asserted directly (by the...more
4/22/2025
/ Breach of Contract ,
Breach of Duty ,
Business Divorce ,
Business Entities ,
Business Litigation ,
California ,
Corporations Code ,
Declaratory Relief ,
Fiduciary Duty ,
Limited Liability Company (LLC) ,
Operating Agreements
Actions taken within business entities are sometimes deemed invalid due to procedural defects. For corporations, section 119 of the Corporations Code establishes a clear procedure by which defective actions can be ratified...more
When an LLC suffers primary harm that also indirectly harms the LLC’s members, the cause of action generally belongs to the LLC, not its members. Only if the LLC (through its duly authorized management) fails to pursue the...more
If an LLC’s Operating Agreement contains a sufficiently broad arbitration clause, most disputes raised by the LLC’s members relating to the LLC will be sent to arbitration (instead of the court system) for resolution.
But...more
The statutory right to judicial dissolution in California comes with a hook — the defendants can avoid dissolution by exercising a “buyout” procedure. This is true in both LLCs (Corporations Code section 17703.03) and...more
Commercial leases often contain attorney fee provisions allowing a party who prevails in litigation to recover attorney fees from the losing party.
Can those attorney fee provisions apply to third parties — outsiders to...more
LLC managers owe fiduciary duties both to the LLC and to the LLC’s members, similar to the duties owed by a partner to other partners in a partnership. (Corp Code §17704.09.) These include the duty of loyalty, care, and...more
9/30/2021
/ Bankruptcy Court ,
Breach of Duty ,
Business Disputes ,
Business Litigation ,
Commercial Bankruptcy ,
Contract Terms ,
Exculpatory Clauses ,
Fiduciary Duty ,
Limited Liability Company (LLC) ,
Malfeasance ,
Operating Agreements ,
Personal Liability ,
Summary Judgment
An LLC Jungle post from last year addressed the issue of whether derivative claims can be pursued for a dissolved LLC. See: Can Derivative Claims be Pursued for a Dissolved or Cancelled LLC? The short answer is “yes.”...more
8/23/2021
/ Attorney's Fees ,
Breach of Contract ,
Business Litigation ,
Contract Terms ,
Corporate Dissolution ,
Derivative Suit ,
Disclosure ,
Fee Awards ,
Limited Liability Company (LLC) ,
Prevailing Party ,
Purchase Agreement ,
Real Estate Development ,
Real Estate Transactions
LLC membership interests are usually straightforward and can determined by simply reviewing the LLC’s operating agreement. The operating agreement typically lists the members. Sometimes the operating agreement will impose...more