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Delaware had barely birthed changes to Section 144 of its General Corporation Law when the Plumbers & Fitters Local 295 Pension Fund filed a complaint challenging those changes. The plaintiff seeks a declaration that the...more
When two or more people become owners of a limited liability company and embody their relationship in an operating agreement, they usually see sunshine and rainbows in their future. They have an idea, they have a corporate...more
One of the earliest signs that a closely-held business is headed for divorce lies in how its owners treat new opportunities. When the relationship among the owners reaches a certain level of distrust, an owner presented with...more
In Congel v Malfitano, New York’s highest court wrote that business partners are free to include in partnership contracts practically “any agreement they wish,” including about “the means by which a partnership will dissolve,...more
Case law involving limited liability companies (LLCs) is rapidly evolving. Some states, most notably Delaware, permit LLCs to limit or eliminate liability for breaches of fiduciary duty by an LLC’s members or managers. Other...more
Under Delaware law, indirect controllers of a Delaware limited liability company (“LLC”) can owe limited fiduciary duties to the LLC and its members if they exert control over the LLC’s assets, unless those duties are clearly...more
A common question from UK and other European emerging technology companies considering U.S. expansion is where to establish their U.S. operations. The answer is not always “the Bay Area” or “New York;” the U.S. is a massive...more
Delaware corporate law allows for a corporation to agree in its organizational documents or contracts to advance legal fees and expenses in defense of actions, arising from a person’s service to the company. Originally...more
Limited liability companies (LLCs) are famously referred to as “creatures of contract”, whereas the governance of a corporation is comparatively fixed by statute. When forming an LLC, the members have broad discretion to...more
On April 30, 2019, Vice Chancellor Tamika Montgomery-Reeves of the Delaware Court of Chancery held that plaintiff Freeman Family LLC (“Freeman”), a member of Park Avenue Landing LLC (the “Company”), is entitled to advancement...more
In a recent opinion issued by the Delaware Court of Chancery, Freeman Family LLC v. Park Avenue Landing LLC, C.A. No. 2018-0683-TMR (Del. Ch. Apr. 30, 2019), Vice Chancellor Montgomery-Reeves granted advancement to a member...more
Operating agreements often specify dilution as the remedy for a failure to make a capital contribution. But what if your business partner fails to make a contribution and you’d rather have the capital than an increased...more
I’ve said it before, I’ll say it again: for professionals who dwell in the world of LLCs, whether as transactional, tax, or litigation counsel, attending the annual, two-day LLC Institute, sponsored by the LLCs, Partnerships...more
When a family business operated as a limited liability company brings on professional management, the parties typically focus on items in the operating agreement such as capital contributions, allocations and distributions,...more
When parties are negotiating over the terms of a Delaware limited liability company operating agreement, the most heavily negotiated provisions typically involve things like capital contributions, allocations and...more