One of the hot button issues frequently leading to litigation in “The LLC Jungle” is the removal of an LLC’s manager.
Thoughtfully drafted LLC Operating Agreements contain provisions addressing the criteria and procedures...more
The trend in most real estate-related LLCs is to have a single appointed manager. Under the LLC’s operating agreement, the manager typically has authority to make the day to day business decisions on behalf of the LLC, while...more
6/10/2019
/ Appeals ,
Attorney Representation Agreements ,
Co-Management ,
Conflict Resolution ,
Disqualification ,
Lack of Authority ,
Limited Liability Company (LLC) ,
Limited Partnerships ,
Managing Members ,
Operating Agreements ,
Partnership Agreements ,
Petition for Partition ,
Real Estate Investments
Under California’s Revised Limited Liability Company Act (“RULLCA”), LLC participants have substantial freedom to structure their relationship in a customized manner under their governing operating agreement. But one of the...more
5/16/2019
/ Attorney's Fees ,
Books & Records ,
Breach of Duty ,
Fiduciary Duty ,
Good Cause ,
Inspection Rights ,
Limited Liability Company (LLC) ,
Managing Members ,
Members ,
Operating Agreements ,
Prevailing Party ,
RULLCA
Most LLC Operating Agreements contain a provision describing the “purpose” of the business.
These “purpose statements” can be extremely broad and open-ended, parroting the boilerplate language required to be present in the...more
One of the recurring issues I see in my litigation practice is LLC managers engaging in “questionable conduct” with third parties — outsiders to the LLC.
By “questionable conduct,” I generally mean binding the LLC to...more
2/25/2019
/ Actual or Constructive Knowledge ,
Agents ,
Appeals ,
Indemnity Agreements ,
Lack of Authority ,
Limited Liability Company (LLC) ,
Managing Members ,
Operating Agreements ,
RULLCA ,
Third-Party Relationships ,
Unauthorized Transactions
It is no secret that LLC managers enjoy a lot of discretion regarding how they operate the LLC. Members of the LLC often find it difficult to challenge the manager’s decisions on key transactions, investments, and other...more
1/14/2019
/ Appeals ,
Contract Terms ,
Covenant of Good Faith and Fair Dealing ,
DE Supreme Court ,
Discretionary Functions ,
Fiduciary Duty ,
Inherent Authority ,
Limited Liability Company (LLC) ,
Managers ,
Members ,
Operating Agreements ,
Selling a Business
LLCs are celebrated for allowing business partners to freely define their relationship by contract — i.e., the LLC operating agreement. The operating agreement generally covers all of the important aspects of the company and...more
11/26/2018
/ Capital Contributions ,
Contract Amendments ,
Corporate Dissolution ,
Dismissals ,
Family Businesses ,
Limited Liability Company (LLC) ,
Managing Members ,
Member Removal ,
Membership Interest ,
Motion to Dismiss ,
Operating Agreements
There are not many published California Court of Appeal opinions providing guidance for LLC managers and members. That’s why it’s an “LLC Jungle” out there.
While unpublished opinions are not binding precedent outside of...more
10/22/2018
/ Bad Faith ,
Breach of Duty ,
Creditors ,
Debtors ,
Default ,
Demurrers ,
Distribution Rules ,
Fiduciary Duty ,
Limited Liability Company (LLC) ,
Managing Members ,
Membership Interest ,
Operating Agreements
The “Seven Critical Mistakes LLCs Make” Series -
This series of posts covers some of the most serious mistakes that LLCs regularly make. Here are...short summaries of each:
Choosing the Wrong Business Partners —...more
10/8/2018
/ Alter Ego ,
Apparent Authority ,
Business Divorce ,
Business Formation ,
Business Partners ,
Covenant of Good Faith and Fair Dealing ,
Due Diligence ,
Duty of Loyalty ,
Fiduciary Duty ,
Founding Members ,
Guaranty Claims ,
Intellectual Property Protection ,
Limited Liability Company (LLC) ,
Managing Members ,
Membership Agreements ,
Membership Interest ,
Operating Agreements ,
Prohibited Transactions ,
Secured Debt ,
Trade Secrets