News & Analysis as of

Limited Liability Company (LLC) Breach of Contract Breach of Duty

Farrell Fritz, P.C.

Bless This Mess: New York Court Shuts Down Attempted Early Ouster of Restauranteur From Managing His Own Restaurant

Farrell Fritz, P.C. on

It is not uncommon in the restaurant business for a restauranteur to partner with a silent-partner investor, i.e. the money guy. It’s not uncommon for the restaurant partners to fight over the control of the restaurant....more

Patton Sullivan Brodehl LLP

LLCs Can Assert Offensive Claims Against Members

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

Fox Rothschild LLP

A Corporate “One Man Band” Might be a Lonely Road, but the Company is Not Always a Puppet

Fox Rothschild LLP on

Matthew Bagley worked for a claims adjustment firm in Louisiana as its claims manager for nearly three years before resigning to, allegedly, improperly compete against his former employer, M.D. Claims Group. In M.D. Claims...more

Fox Rothschild LLP

JNOV is a Tough Road, but it’s Not a One in a Million Shot

Fox Rothschild LLP on

A party seeking to unseat a verdict by JNOV “bears a heavy burden under North Carolina law.” Only a “scintilla of evidence” is needed to support the elements of the prevailing claim. But as the Business Court reminded in...more

Cadwalader, Wickersham & Taft LLP

Title (Coverage) Not Available

Two recent decisions concerning title insurance illustrate that an insured’s negligence can result in an exclusion from coverage and that title insurers generally do not owe a fiduciary duty to their insureds....more

Farrell Fritz, P.C.

Court Enjoins Dilution of Brewing Company LLC Membership Interest

Farrell Fritz, P.C. on

Most folks associate beer with pleasure. Many craft brewers will tell you they went into business for that reason: to make themselves and others happy (and, oh yeah, make money). ...more

Morris James LLP

Chancery Addresses Whether LLC Agreement Modified or Eliminated Fiduciary Duties

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In Re Cadira Group Holdings, LLC Litigation, Consolidated C.A. No. 2018-0616-JRS (Del. Ch. July 12, 2021) - The Delaware Limited Liability Company Act provides that “the fiduciary duties of a member, manager, or other...more

Morris James LLP

Chancery Explains Pleading Standard and Sustains Unjust Enrichment Claim Related to Plaintiff’s Forfeiture of LLC Acquisition...

Morris James LLP on

Angel v. Warrior Met Coal, Inc., C.A. No. 2019-0235-SG (Del. Ch. Jun. 30, 2021) - Under Delaware’s notice pleading standard, a plaintiff’s claim will survive a motion to dismiss if it is “reasonably conceivable” that the...more

Morris James LLP

Chancery Addresses Claims Arising Out of LLC Dispute Involving Parallel Venture

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Largo Legacy Group, LLC v. Evens Charles, C.A. No. 2020-0105-MTZ (Del. Ch. June 30, 2021) - In this LLC dispute, an investor in a hotel development company alleged that the company principals breached the operating...more

Morris James LLP

Implied Covenant of Good Faith and Fair Dealing Saves Employee’s Claim for Improper Termination Under Company’s LLC Agreement

Morris James LLP on

Smith v. Scott, C.A. No. 2020-0263-JRS (Del. Ch. Apr. 23, 2021) - The Delaware LLC Act provides that fiduciary duties may be expanded or limited by the provisions of an LLC agreement. If the agreement is silent, then...more

Patterson Belknap Webb & Tyler LLP

Commercial Division Closes Door to Derivative Claims on Behalf of Cancelled LLC

The Commercial Division recently ruled, in a case captioned as Hopkins v. Ackerman, that derivative claims on behalf of an LLC need to be brought before the LLC ceases to exist. ...more

K&L Gates LLP

Chancery Court Grants Defendant’s Motion On The Pleadings Where Named Defendants Did Not Owe Any Of The Contractual Or Fiduciary...

K&L Gates LLP on

In Ross v. Institutional Longevity Assets LLC, C.A. No. 2017-0186-TMR (Del. Ch. Feb. 26, 2019), the Chancery Court, in a motion for judgement on the pleadings, found that the plain language of a limited liability company’s...more

Morris James LLP

Court Of Chancery Applies LLC Contractual Fiduciary Duty

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MHS Capital LLC v. Goggin, C.A. No. 2017-0449-SG (May 10, 2018) - Alternative entity agreements may eliminate common law fiduciary duties and often do, supplanting them with contractual fiduciary duties....more

Allen Matkins

Court Rules LLC Members May Be “Fiduciaries In Fact”

Allen Matkins on

U.S. District Court Judge Tena Campbell’s ruling in Strong v. Cochran, 2017 U.S. Dist. LEXIS 170073, is a reminder that sometimes what you do matters more than what you say. The case involved claims by the liquidating...more

Carlton Fields

Tenth Circuit Upholds Confirmation Of Arbitral Award In LLC Dissolution Dispute

Carlton Fields on

The Tenth Circuit recently affirmed a district court’s confirmation of an arbitration award in a dispute regarding the dissolution of Knowledge Strategy Solutions, LLC (“KSS”). KSS was a partnership between the professional...more

Winstead PC

Court Finds That Breach Of Fiduciary Duty Claims Is Preempted By Trade Secrets Claim

Winstead PC on

In Super Starr Int’l, LLC v. Fresh Tex Produce, LLC, a Texas entity that distributes produce throughout the United States filed suit against another Texas entity that imports foreign grown produce into the United States and...more

Butler Snow LLP

The Tennessee Business Court Tackles Privilege Claims

Butler Snow LLP on

The Tennessee Business Court has provided additional guidance to commercial litigators concerning internecine legal battles between members of limited liability companies. The Court has determined the fiduciary duties of...more

Pullman & Comley, LLC

Appellate Court Notes

Pullman & Comley, LLC on

Supreme Court Advance Release Opinions: SC19493 - Standard Oil of Connecticut, Inc. v. Administrator, Unemployment Compensation Act - SC19493 Dissent - Standard Oil of Connecticut, Inc. v. Administrator,...more

Morris James LLP

Court Of Chancery Declines Stay In LLC Advancement Case

Morris James LLP on

Tulum Management USA LLC v. Casten, C.A. 11321-VCN (November 9, 2015) - A Delaware court will not stay its hand in favor of litigation elsewhere in an advancement or indemnification case absent “exceptional...more

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